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Ibeere 1 Ìròyìn
Awọn alaye Idahun
Factory overheads are also known as indirect cost. This term refers to the expenses incurred in a factory that cannot be directly attributed to the production of a specific product or service. These costs include items such as factory rent, utilities, depreciation of factory equipment, and indirect labor costs. Unlike direct manufacturing expenses, which are directly tied to the production process, factory overheads contribute to the overall manufacturing process but are not directly traceable to a specific product.
Ibeere 2 Ìròyìn
The principle of double entry developed from the axioms of accounting equation is given as
Awọn alaye Idahun
The accounting equation states that:
- Capital( Equity) = Assets - Liabilities
- Assets = Capital (Equity) - Liabilties
- Liabilties = Assets - Capital (Equity)
- Equity(Capital ) = Assets
Ibeere 3 Ìròyìn
The following was extracted from the books of MEGA COMPANY NIG. LTD
₦ |
|
Trade debtors |
350,000 |
Fixtures and fittings |
600,000 |
Cash at bank |
25,000 |
Cash in hand |
5,500 |
Trade creditors |
116,500 |
Bank overdraft |
7,500 |
Building |
950,000 |
Motor van |
35,000 |
The working capital of the company is
Awọn alaye Idahun
Working capital = Current Assets - Current Liabilites
= (350,000 + 25,000 + 5,500) - ( 116,500 + 7,500)
= 380,500 - 124, 000
= ₦256,500
Ibeere 4 Ìròyìn
Dr. Sales Ledger Control Account . Cr
₦ | ₦ |
||
Bal b/f | 3,250 | Bal b/f | 125 |
Sales | 19,075 | Bank | 16,387.50 |
Dishonoured cheque |
625 | Discount | 862.50 |
Stopped cheque |
250 | Returns inwards | 325 |
Bal c/d | 230 | Set off | 900 |
Bal c/d | 4740 | ||
23430 | 23430 |
||
Bal b/d | 4740 | Bal b/d | 230 |
The amount ₦19,075 represents
Awọn alaye Idahun
The amount ₦19,075 represents credit sales. In the Sales Ledger Control Account, the 'Sales' line item typically represents credit sales made during the period. Cash sales would usually be recorded directly in the bank or cash account, not in the sales ledger control account. The sales ledger control account is used to record transactions with credit customers, including sales, payments, returns and discounts
Ibeere 5 Ìròyìn
Which of the following is found on the credit side of a profit and loss account?
Awọn alaye Idahun
On the credit side of a profit and loss account, we can find items that generate income or gains for a business. Let's discuss each option and determine whether it belongs on the credit side or not. - **Advertising:** Advertising expenses are costs incurred to promote products or services. These expenses reduce a company's income or profits and are recorded on the debit side of the profit and loss account. Therefore, advertising does not belong on the credit side. - **Dividend received:** Dividends received are income earned by a company from its investments in other companies. Dividend income increases a company's overall income or profits and is recorded on the credit side of the profit and loss account. So, dividends received are found on the credit side. - **Wages and salaries:** Wages and salaries represent the compensation paid to employees for their work. These expenses are considered as costs incurred to generate revenue and are recorded on the debit side of the profit and loss account. Therefore, wages and salaries do not belong on the credit side. - **Bank charges:** Bank charges are fees or costs that a company incurs for various banking services, such as transaction fees, account maintenance fees, etc. These charges reduce a company's income or profits and are recorded on the debit side of the profit and loss account. Therefore, bank charges do not belong on the credit side. In conclusion, out of the given options, only **dividend received** will be found on the credit side of a profit and loss account.
Ibeere 6 Ìròyìn
The short term solvency of a company is determined with ------- ratio
Awọn alaye Idahun
The short term solvency of a company is determined using the current ratio. The current ratio is a financial ratio that measures a company's ability to pay off its short-term liabilities (debts due within one year) with its short-term assets (assets that can be converted into cash within one year).
To calculate the current ratio, you divide a company's current assets (such as cash, inventory, and accounts receivable) by its current liabilities (such as accounts payable and short-term loans). The formula is:
Current Ratio = Current Assets / Current Liabilities
The current ratio provides valuable insight into a company's ability to meet its short-term financial obligations. A ratio higher than 1 indicates that the company has enough current assets to cover its current liabilities. This generally indicates good short-term solvency.
For example, if a company has current assets of $100,000 and current liabilities of $50,000, its current ratio would be 2. This means that the company has twice as many current assets as current liabilities, which is generally a good sign.
On the other hand, a current ratio lower than 1 implies that the company may have trouble paying off its short-term debts. This could indicate potential financial strain or difficulty in managing short-term liquidity.
Overall, the current ratio helps assess a company's ability to meet its short-term obligations. It provides a simple and comprehensible way to evaluate a company's short-term solvency by comparing its current assets to its current liabilities.
Ibeere 7 Ìròyìn
Awọn alaye Idahun
Another name for control accounts is **total account**. Control accounts are summary accounts that are used to monitor and reconcile the balances in individual subsidiary accounts. They serve as a means of controlling and verifying the accuracy of the transactions recorded in the subsidiary accounts. A control account, such as a total account, contains the summarized information from multiple related subsidiary accounts. It simplifies the process of monitoring and managing the subsidiary accounts by providing a single balance that represents the total of the individual account balances. For example, in the context of a business's accounts receivable, the control account would be the total account that represents the combined balance of all the individual debtor accounts. Similarly, in the context of a business's accounts payable, the control account would be the total account that represents the combined balance of all the individual creditor accounts. By using control accounts, businesses can easily identify any discrepancies or errors in the subsidiary accounts. They can compare the balances in the control accounts with the detailed balances in the subsidiary accounts to ensure accuracy and detect any discrepancies. This helps in maintaining the integrity of the financial records and ensuring that the accounts are reconciled properly. In summary, control accounts, also known as total accounts, are summary accounts that consolidate and monitor the balances of individual subsidiary accounts. They provide a simplified and efficient way of managing and reconciling the subsidiary accounts, ensuring accuracy in the financial records.
Ibeere 8 Ìròyìn
Danladi Bako's Statement of Affairs as at 30/06/17
₦ | ₦ |
||
Capital | ?? | Fixtures and fittings | 4,000 |
Stock | 20,500 | ||
Sundry debtors | 40,000 | ||
Creditors |
18,000 | Bank | ?? |
78650 | 78650 |
What is the value of Dalandi Bako's capital?
Awọn alaye Idahun
The capital is calculated as the difference between total assets and total liabilities. Therefore, the correct answer is ₦60,650.
Ibeere 9 Ìròyìn
Dairo and Segun are in partnership sharing profits and losses in the ratio 2:3 respectively. The information below relates to their business for the year ended 31st December, 2018.
Drawings: | ₦ |
Dairo | 12000 |
Segun | 18000 |
Capital: | |
Dairo | 120000 |
Segun | 60000 |
- Interest on drawings 10%
- Interest on capital 5%
- Profit for the year ₦36,000
- Salary: Segun ₦10,000
Segun's share of profit is
Awọn alaye Idahun
Interest on drawings = 10%
- Dairo = 10% x 12,0000
= ₦1200
- Segun = 10% x 18,000
= ₦1800
Interest on capital = 5%
- Dairo = 5% x 120,000
= ₦6,000
- Segun = 5% x 60,000
=₦3,000
Salary: segun = ₦10,000
Segun's share of profit = (Net profit + int on drawings) - ( int on capital + segun salary )
= (36000 + 1200 + 1800) - ( 6000 + 3000 + 10000)
= 39000 - 19000
= 20,000
Total ratio = 2+ 3
= 5
Therefore, Segun share of profit = 3 /5 x 20000
= ₦12,000
Ibeere 10 Ìròyìn
₦ |
|
Balance as per cash book |
5467 |
Uncredited cheques |
4410 |
Unpresented cheques |
19404 |
The balance as per bank statement is
Awọn alaye Idahun
The balance as per bank statement is calculated by adding the balance as per cash book and the unpresented cheques then subtracting the uncredited cheques. Therefore, the balance as per bank statement is ₦5467 + ₦19404 - ₦4410 = ₦20,461. Unpresented cheques are cheques that have been issued by a company but have not yet cleared through the bank. Uncredited cheques are cheques that have been received by a company but have not yet cleared through the bank.
Ibeere 11 Ìròyìn
The authority to transfer fund from one head to another within the same organization is called
Awọn alaye Idahun
The authority to transfer funds from one head to another within the same organization is called virement.
Virement is a process that allows organizations to shift money from one budget head to another. This transfer of funds is done to reallocate resources based on the changing needs and priorities of the organization.
For example, let's say an organization has allocated a certain amount of money for a particular project in their budget. However, during the course of the year, they realize that another project requires additional funding. Instead of going through a lengthy process of obtaining new funds, the organization can use virement to transfer money from the initial project's budget to the new project's budget.
Virement provides flexibility and allows organizations to make adjustments without having to seek additional approvals or go through administrative hurdles. It is an internal process that helps ensure efficient resource utilization within an organization.
In summary, virement is the authority to transfer funds from one head to another within the same organization. It allows for the reallocation of financial resources based on changing priorities and needs.
Ibeere 12 Ìròyìn
The document issued by a revenue collector as evidence of payment to a government ministry is a
Awọn alaye Idahun
Receipt voucher are document used to acknowledge the receipt of public revenue.
Ibeere 13 Ìròyìn
Awọn alaye Idahun
The ultimate controller, refers to the shareholder who has the ultimate control in the company and is not controlled by anyone. This ownership structure often results in a certain level of control between the ultimate controller and the listed company.
Ibeere 14 Ìròyìn
One of the options below is not the source of income for non - profit organization
Awọn alaye Idahun
The source of income for a non-profit organization is typically different from that of a for-profit organization. Non-profit organizations do not generate income through the distribution of ordinary shares, as they do not have shareholders who invest in their organization in exchange for ownership and dividends. Instead, non-profit organizations rely on other means to generate income. One of the main sources is through donations. Individuals, corporations, and foundations can donate money, goods, or services to support the organization's mission and activities. These donations are voluntary contributions made out of goodwill and with the intention of supporting the cause the organization is working towards. Another source of income for non-profit organizations is through subscription or dues. Some non-profits have membership programs where individuals or organizations pay a regular fee or due to become a member. These membership fees contribute to the income of the organization and may provide members with certain benefits or privileges. Lastly, entrance fees can also serve as a source of income for non-profit organizations. Some organizations, such as museums, art galleries, or educational institutions, charge entrance fees for individuals to access their facilities or events. These fees help cover operational costs and support the organization's activities. In summary, while non-profit organizations do not generate income through ordinary shares, they rely on donations, subscription/dues, and entrance fees to financially support their mission and work.
Ibeere 15 Ìròyìn
Capital for a profit making organization is generated through
Awọn alaye Idahun
Shares can be issued to the public for subscription. A lot of money can be raised to finance the operation of the business through the issue of new shares to members of the public.
Ibeere 16 Ìròyìn
Bello withdraws cash from bank to office, this is called ---------- entry
Awọn alaye Idahun
Contra entry is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, it will be recorded on the credit side and vice-versa.
Ibeere 17 Ìròyìn
An evidence of payment issued to a government ministry by a revenue collector is
Awọn alaye Idahun
Receipt voucher are documents used for acknowledgement the receipt of public revenue. They must be issued out anytime revenue is collected by government ministries
Ibeere 18 Ìròyìn
Which of the following expenses is *not* apportined in proportion to turnover?
Awọn alaye Idahun
The expense that is not apportioned in proportion to turnover is **rent**. To understand why, let's first understand what it means to apportion an expense in proportion to turnover. When an expense is apportioned in proportion to turnover, it means that the amount of the expense is allocated based on the amount of revenue or sales generated by a business. Now, let's look at the other expenses listed: - **Commission**: This expense is typically a percentage of the sales or revenue earned by the business. So, it is directly proportional to turnover. The more sales or revenue generated, the higher the commission expense will be. - **Discount allowed**: This expense is also directly related to turnover. When a business offers discounts to customers, the amount of the discount is deducted from the revenue earned. So, the higher the turnover, the higher the discount allowed expense. - **Carriage outwards**: This expense refers to the cost of delivering goods to customers. It is directly related to turnover because the more goods sold, the more deliveries need to be made and therefore the higher the carriage outwards expense. Now, let's focus on **rent**. Rent is a fixed expense that a business pays for using a physical space, such as a store or office. It is not directly related to the amount of sales or revenue generated. Even if a business has higher sales or turnover, the rent expense remains the same. Therefore, it is not apportioned in proportion to turnover. In summary, among the given options, the expense that is not apportioned in proportion to turnover is **rent**.
Ibeere 19 Ìròyìn
₦ | ₦ |
||
Bal. b/f |
3,250 | Bal. b/f. | 215 |
Sales |
19,075 | Bank | 16,387.50 |
Dishonoured cheque |
625 | Discount | 862.50 |
Stopped cheque |
250 | Returns inwards | 325 |
Bal c/d |
230 | Set off | 900 |
Bal c/d | 4740 |
||
23,430 | 23430 |
||
Bal b/d |
4740 | Bal b/d | 230 |
Dr. Sales Ledger Control Account . Cr
The amount ₦16,378.50 described as "Bank" represents
Awọn alaye Idahun
The amount ₦16,387.50 described as "Bank" in the Sales Ledger Control Account represents receipts from all debtors of the business.
In accounting, a Sales Ledger Control Account is used to keep track of the total amount owed by the customers (debtors) of a business. It is a summary account that consolidates all the individual customer accounts.
When a customer makes a payment, it is recorded as a receipt in the Sales Ledger Control Account. This includes payments received from both trade debtors (customers who owe money for credit sales) and cash sales (sales made in cash).
The ₦16,387.50 recorded as "Bank" in the Sales Ledger Control Account includes all the cash received from trade debtors as well as the cash sales made during the month, including any discounts given. Therefore, the correct answer is receipts from all debtors of the business.
It is important to note that the other options provided - receipts from trade debtors only, cash sales for the month including discount, and cash sales for the month excluding discount - are not accurate descriptions of the ₦16,387.50 recorded as "Bank" in the Sales Ledger Control Account.
Ibeere 20 Ìròyìn
Changes in the profit sharing ratio may occur as a result of
I. skill contributed by partners
II. health status
III. old age
IV. Intangible asset increase
Awọn alaye Idahun
Change in profit sharing ratio may occur as a result of the following:
- changes in skill contributed by partners
- ill health
- old age
Ibeere 21 Ìròyìn
Which of the following is used in the public sector to monitor or control government expenditure?
Awọn alaye Idahun
In the public sector, the **vote book** is used to monitor and control government expenditure. The vote book is a record-keeping tool that helps in tracking how government funds are being spent. It is used to record and track all financial transactions related to government expenditure. Here is a simple explanation of how the vote book works: 1. Each government department or ministry is allocated a specific budget for a financial year. 2. The vote book is used to allocate and track the funds allocated to each department or ministry. 3. Whenever a department or ministry wants to spend money from their allocated budget, they need to make an entry in the vote book. 4. These entries in the vote book include details such as the purpose of expenditure, the amount, and any supporting documentation. 5. By maintaining a vote book, the government can monitor and control the expenses incurred by each department or ministry. 6. The vote book also helps to ensure that government funds are being used for the intended purposes and are not being misused or wasted. 7. Regular analysis and review of the vote book enable the government to assess the effectiveness of their spending and make informed decisions for future budgets. In summary, the vote book is essential in the public sector as it serves as a monitoring and control mechanism for government expenditure. It ensures transparency and accountability and helps in making informed financial decisions.
Ibeere 22 Ìròyìn
Which of these is not a subsidiary books?
Awọn alaye Idahun
The subsidiary book is a book of original entr or prime entry which consists of: purchases day book, sales day book, returns inwards day book, returns outward day book, cash book, journal, petty cash book.
Ibeere 23 Ìròyìn
In the absence of a partnership agreement, a loan given to the partnership by a partner attracts interest of
Awọn alaye Idahun
Where there is no agreement betwen the partners, the following must applied:
- there is no interest on capital
- no salary for partners acting in the business
- no interest to be charged on drawings
- profit and loss are to be shared equally
- 5% interest a year on loans made by partners in excess of the agreed capitals
- no partners may introduce a new person without the consent of all existing partners
Ibeere 24 Ìròyìn
Which of the following is charged to trading account?
Awọn alaye Idahun
A trading account is a financial statement that shows the profit or loss of a business through its trading activities. It includes all the revenues and expenses directly related to the buying and selling of goods. Out of the options provided, the expenses that are charged to the trading account are: 1. Carriage Inwards: Carriage inwards refers to the transportation costs incurred in bringing goods into the business. It can include expenses such as freight charges, import duties, and handling fees. These expenses are directly related to the purchase of goods and are considered a part of the cost of inventory. Hence, carriage inwards is charged to the trading account. 2. Carriage Outwards: Carriage outwards refers to the transportation costs incurred in delivering goods from the business to the customers. It includes expenses such as delivery charges, packaging costs, and shipping fees. Carriage outwards is not directly related to the purchase of goods but is rather an expense incurred in selling them. Therefore, carriage outwards is not charged to the trading account. 3. Rent: Rent refers to the cost of occupying a property for business purposes. Rent is not directly related to the buying and selling of goods, but rather to the use of the premises where the business operates. Hence, rent is not charged to the trading account. 4. Discount Allowed: Discount allowed represents the reduction in the selling price of goods given to customers as an incentive or reward. It is a reduction in revenue and does not directly relate to the cost of inventory or the buying and selling of goods. Therefore, discount allowed is not charged to the trading account. In summary, the expenses that are charged to the trading account are carriage inwards. Rent, discount allowed, and carriage outwards are not charged to the trading account as they are not directly related to the buying and selling of goods.
Ibeere 25 Ìròyìn
Dairo and Segun are in partnership sharing profits and losses in the ratio 2:3 respectively. The information below relates to their business for the year ended 31st December, 2018.
Drawings: |
₦ |
Dairo | 12000 |
Segun | 18000 |
Capital | |
Dairo | 120000 |
Segun | 60000 |
- Interest on drawings 10%
- Interest on capital 5%
- Profit for the year ₦36,000
- Salary: Segun ₦10,000
The interest on Dairo's drawings is
Awọn alaye Idahun
To calculate the interest on Dairo's drawings, we need to find out the total drawings made by Dairo during the year. Dairo's drawings: ₦12,000 Now, let's calculate the interest on Dairo's drawings using the formula: Interest on Drawings = Drawings * Rate of Interest Given: Rate of Interest = 10% Interest on Dairo's drawings = ₦12,000 * 10% = ₦1,200 Therefore, the interest on Dairo's drawings is ₦1,200.
Ibeere 26 Ìròyìn
Salaries in arrears is treated in the balance sheet as a
Awọn alaye Idahun
Salaries in arrears are treated in the balance sheet as a **current liability**. A balance sheet is a financial statement that shows a company's financial position at a specific point in time. It consists of three main sections: assets, liabilities, and owners' equity. Salaries in arrears are payments that a company owes to its employees for work that has already been performed but not yet paid. This is usually the result of a timing difference between when the work was done and when the payroll is processed. Since these unpaid salaries are obligations that need to be settled within one year, they are classified as current liabilities. Current liabilities are debts or obligations that must be paid within a year or the normal operating cycle of a business, whichever is longer. By reporting salaries in arrears as a current liability on the balance sheet, it provides information to stakeholders, such as investors and creditors, about the company's short-term financial obligations. It helps to give a more accurate picture of the company's financial health and its ability to meet its current obligations. Therefore, salaries in arrears are considered a current liability on the balance sheet.
Ibeere 27 Ìròyìn
When goods are received from head office, head office will be credited while
Awọn alaye Idahun
Goods received from head office
Accounting entries:
Dr: Purchase account
Cr: Head office current account
Ibeere 28 Ìròyìn
The account where the profit are distributed to the partner in their profit sharing ratio in partnership
Awọn alaye Idahun
In a partnership, the account where the profit is distributed to the partners according to their profit sharing ratio is called the **appropriation account**. The appropriation account is a separate account created to record the distribution of profit among the partners. It is prepared after the preparation of the trading account, profit and loss account, and balance sheet. Here's a simple breakdown of the other options and their roles in the partnership: - The **trading account** is prepared to calculate the gross profit or loss of the partnership. It includes revenue from sales, cost of goods sold, and any other trading-related expenses. - The **profit and loss account** is prepared to determine the net profit or loss of the partnership. It includes all the operating expenses, such as salaries, rent, advertising, and depreciation. - The **balance sheet** is a financial statement that shows the financial position of the partnership at a specific point in time. It includes the assets, liabilities, and capital of the partnership. So, to summarize, while the trading account, profit and loss account, and balance sheet provide information about the overall financial performance and position of the partnership, the appropriation account specifically deals with the distribution of profit among the partners based on their profit sharing ratio.
Ibeere 29 Ìròyìn
The purchases ledger control account is also known as
Awọn alaye Idahun
The purchases ledger control account is also known as the creditors control account.
Let me explain it simply for you.
In a business, the purchases ledger records all the transactions related to buying goods or services on credit. It keeps track of the amounts owed to suppliers or vendors. Now, the purchases ledger control account is a summary account that helps in monitoring and controlling these transactions.
Think of it as a big picture view. The purchases ledger control account combines all the individual creditor balances from the purchases ledger. It shows the total amount the business owes to its creditors at any given time.
By using the purchases ledger control account, the business can easily track the total purchases made on credit and manage its outstanding payments to suppliers. It provides a summary of the business's total credit purchases and the total amount owed to creditors.
So, in summary, the purchases ledger control account is the same as the creditors control account because it represents a summary of all the amounts owed to suppliers or vendors.
Ibeere 30 Ìròyìn
Given:
I. Cash refunds
II. Debit note issued
III. Dishnoured cheque
IV. Purchases
The item on the credit side of purchase ledger control account includes
Awọn alaye Idahun
The correct answer is I and IV only.
In a purchase ledger control account, the credit side represents the transactions that increase the amount owed to suppliers. Therefore, the items on the credit side of the purchase ledger control account include:
Cash refunds: When a supplier returns cash to the business for overpaid or returned goods, it is recorded as a credit in the purchase ledger control account. This reduces the amount owed to the supplier.
Purchases: When goods are purchased on credit from a supplier, the value of these purchases is recorded as a credit in the purchase ledger control account. This represents the increase in the amount owed to the supplier.
Debit note issued and dishonored cheques do not directly affect the purchase ledger control account. A debit note is typically used to record an increase in the amount owed to the business by a customer, not the supplier. A dishonored cheque indicates that the payment was not successful, but it does not impact the purchase ledger control account.
Therefore, the correct answer is I and IV only, as cash refunds and purchases are the only items on the credit side of the purchase ledger control account.
Ibeere 31 Ìròyìn
The Accounting term used to describe a partnership firm that stops operation and disposes its assets is
Awọn alaye Idahun
The accounting term used to describe a partnership firm that stops operation and disposes its assets is Dissolution.
Dissolution refers to the process of ending the partnership and distributing the assets among partners. It occurs when partners agree to terminate the business, or when a specific event, such as the death of a partner, triggers the dissolution.
During the dissolution process, the firm's assets, including cash, inventory, equipment, and investments, are evaluated and sold. The proceeds from the sale are then used to pay off any outstanding liabilities, such as loans or debts. If there are any remaining assets after settling the liabilities, they are distributed among the partners based on their respective capital account balances.
It is important to note that the dissolution of a partnership does not mean the same as bankruptcy. Dissolution is a planned process of winding up the partnership's affairs, while bankruptcy occurs when a business is unable to pay its debts. In dissolution, partners work together to settle the financial obligations and distribute the remaining assets, ensuring a smooth and orderly conclusion to the partnership.
Ibeere 32 Ìròyìn
Given:
I. It records subscription in arrears
II. Payments of liabilities is effected
III. The account does not show if cash payment is revenue or capital expenditure
IV. It performs the same function as cash book
The features of receipts and payment account includes:
Awọn alaye Idahun
The features are:
- include capital and revenue items
- accruals and prepayments are not included
- it is a real account
- only actual receipts and payments are recorded
- balance represent cash in hand
Ibeere 33 Ìròyìn
# | |
Stock Jan 1 |
2600 |
Purchases | 4000 |
Carriage inwards | 500 |
Sales | 9000 |
Carriage outwards | 500 |
Determine the net profit
Awọn alaye Idahun
To determine the net profit, we need to calculate the Cost of Goods Sold (COGS) and deduct it from the net sales.
First, let's calculate the COGS: - Start with the stock on January 1st: 2,600 - Add purchases: 4,000 - Add carriage inwards: 500
Total Cost of Goods Available for Sale: 7,100
Next, let's calculate the net sales: - Total Sales: 9,000 - Deduct carriage outwards: 500
Net Sales: 8,500
Now, we can calculate the COGS by dividing the net sales by the total cost of goods available for sale and multiplying by 100: COGS = (COGS / Total Cost of Goods Available for Sale) * Net Sales
COGS = (7,100 / 8,500) * 100 COGS = 83.53%
Finally, we can calculate the net profit by deducting the COGS from the net sales: Net Profit = Net Sales - COGS
Net Profit = 8,500 - (8,500 * 0.8353) Net Profit = 8,500 - 7,098.75 Net Profit = 1,401.25
Therefore, the net profit is #1,401.25.
The correct answer is: #1,400
Ibeere 34 Ìròyìn
The assumption that a business will continue to exist into the foreseeanle future is recognized by a concept called
Awọn alaye Idahun
The concept that recognizes the assumption of a business continuing to exist into the foreseeable future is called "going concern." This concept assumes that a business will not be liquidated or cease to operate in the near future. It is based on the belief that businesses are established with the intention of operating indefinitely, unless there is evidence to suggest otherwise. The "going concern" concept is important because it affects how a business's financial statements are prepared. When preparing financial statements, the assumption is made that the business will continue its operations and fulfill its commitments. This assumption allows the use of historical cost accounting, where assets and liabilities are recorded at their original cost. In simpler terms, the "going concern" concept basically means that when a business is being evaluated, it is assumed to be an ongoing entity with no immediate plans of shutting down. This assumption allows for consistent and reliable financial reporting, as it reflects the expectation that the business will continue its operations and meet its obligations in the future.
Ibeere 35 Ìròyìn
The use of three column cash book is determined by
Awọn alaye Idahun
The cash discount is allowed for prompt payment of an account or for payment within a specified period of time. It is divided into discount allowed and discount received.
Ibeere 36 Ìròyìn
Accounting entry for dissolution expenses is
Awọn alaye Idahun
The correct accounting entry for dissolution expenses is:
Dr: Realization account; Cr: Cash account.
When a partnership is dissolved, there may be expenses incurred during the winding up of the business. These expenses could include legal fees, accounting fees, and other costs related to the dissolution process.
In accounting, we need to record these expenses accurately. The first step is to debit (Dr) the Realization account. The Realization account is used to record all the assets that are sold or converted to cash during the liquidation process. By debiting this account, we reduce the value of the assets being realized.
Next, we credit (Cr) the Cash account. This entry reflects the payment of actual cash for the dissolution expenses. By crediting the Cash account, we increase the amount of cash that is being paid out from the partnership.
Overall, the dissolution expenses are recorded by debiting the Realization account and crediting the Cash account. This ensures that the expenses are properly accounted for and the financial statements accurately reflect the partnership's liquidation process.
Ibeere 37 Ìròyìn
A part of public company's profit belonging to the shareholders is
Awọn alaye Idahun
The part of a public company's profit that belongs to the shareholders is called dividends. Dividends are payments made by a company to its shareholders as a reward for owning its stock. They are usually distributed in the form of cash but can also be given as additional shares of stock. Dividends are a way for shareholders to earn a return on their investment. When a company earns a profit, it can choose to reinvest that money back into the business or distribute it to the shareholders. By receiving dividends, shareholders can directly benefit from the company's success. It is important to note that dividends are not guaranteed and can vary from year to year. The company's board of directors decides whether to declare dividends and how much to distribute based on factors such as profitability, financial health, and future growth prospects. Unlike dividends, the other options mentioned (right issue, bonus, and public issue) do not represent a share of the company's profit. A right issue is when a company offers its existing shareholders the right to buy additional shares at a discounted price. A bonus is an additional issue of shares given to existing shareholders as a way to increase their ownership percentage. A public issue refers to the process of offering shares to the general public for the first time during an initial public offering (IPO) or a subsequent public offering. In summary, dividends are the part of a public company's profit that is distributed to the shareholders as a way for them to earn a return on their investment.
Ibeere 38 Ìròyìn
Which of the following is used to service all operations of government?
Awọn alaye Idahun
The option that is used to service all operations of government is **consolidated revenue fund**. The consolidated revenue fund is like a big pot where all the money collected by the government goes into. This includes the taxes that people and businesses pay, as well as other sources of revenue such as fees and fines. Once the money is in the consolidated revenue fund, it is then used to pay for various government expenses. This includes things like salaries of government employees, funding for public programs and services, and infrastructure projects like building roads and schools. The important thing to note is that the consolidated revenue fund is used to cover all aspects of government operations. It is the central source of income that allows the government to function and provide services to the public. Therefore, the correct option that is used to service all operations of government is the **consolidated revenue fund**.
Ibeere 39 Ìròyìn
₦ |
|
Manufacturing wages |
42,000 |
Factory rent |
880 |
Raw materials: Stock 1/1/16 |
1,000 |
Purchases |
16,000 |
Stock 31/12/16 |
1,400 |
Depreciation of Plants and Machinery |
800 |
Royalties |
300 |
Indirect wages |
18,000 |
General indirect expenses |
620 |
What is the value of the indirect manufacturing cost?
Awọn alaye Idahun
Indirect cost = 880 + 800 + 18000 + 620
= ₦20300
Ibeere 40 Ìròyìn
Given:
I. Settlement of debts
II. Cessation of business
III. Introduction of assets
IV. Disposal of assets
Which of these constitutes dissolution of partnership?
Awọn alaye Idahun
Bankruptcy of a partner, illegality of object of the business, expiration of the time given, non performance of the business, admission of a new partner, withdrawal or retirement of partners give rise to dissolution of partnership.
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