JAMB UTME - Principles of Accounts - 2003
Question 1 Report
Verifiability in accounting is only possible when there are?
Answer Details
Verifiability in accounting refers to the ability to confirm the accuracy and reliability of financial information presented in accounting records. This is only possible when there are source documents available to support the transactions recorded. Source documents provide evidence of the occurrence of a transaction, such as a sales invoice or a purchase receipt. For example, if a company records a sale of a product, the verifiability of this transaction would depend on the existence of a sales invoice that can be traced back to the customer. Without the sales invoice, it would be difficult to confirm the occurrence of the sale and the accuracy of the recorded revenue. Payment vouchers and minutes of meetings may provide additional evidence to support the occurrence of a transaction, but without source documents, it would be difficult to verify the accuracy and reliability of the financial information presented. Audit certificates, on the other hand, are issued by independent auditors after conducting an audit of the company's financial statements. While they provide assurance on the accuracy of the financial information presented, they are not the only means of achieving verifiability in accounting. Source documents remain a critical element in verifying the accuracy and reliability of financial information.
Question 2 Report
Which accounting concept supports the assertion that economic reality takes precedence over legal issues?
Answer Details
The accounting concept that supports the assertion that economic reality takes precedence over legal issues is the "substance over form" concept. This concept states that the economic substance of a transaction or event should be recorded in the financial statements rather than just the legal form of the transaction. In other words, the true nature and economic impact of a transaction should be reflected in the financial statements even if the legal documentation does not fully support it. This concept helps to ensure that financial statements provide a fair and accurate representation of the company's financial position and performance.
Question 3 Report
The amount of each invoiced goods sent to the branch is debited to?
Answer Details
Question 4 Report
Use the information to answer this question.
..............ZEBRA PLC..............
.............Balance sheet as at 31st March, 2002
...............N...............N............N......
Capital......100,000...Fixed assets:
Current................Land &..................
Liabilities...........buildings..50,000......
Creditors........30000..Furniture..10,000....60,000
.......................Current..................
.......................Assets: .......
..................Stock .........30,000...........
..................Debtors.......30,000.............
..................Cash..........10,000......70,000..
.............130,000.........................130,000
The business was acquired on 1st April, 2002 at a purchase consideration of N120,000 by SOZ. All assets and liabilities were taken over except the cash to open the new firm's bank account additional N20,000 was paid into the bank.
Answer Details
Question 5 Report
Mamsa Nigeria Limited issued 20 000 ordinary shares of ₦1.50 per share on 2nd July 2002.
1500 ordinary shares were fully subscribed for and their monies received as below:On application .........................₦0.40
On allotment ...........................₦0.20
First call (including premium of₦0.50)..₦0.70What is the balance of the ordinary share capital account after the first call was received?
Answer Details
Question 6 Report
Receipts and payments accounts is the summary of?
Answer Details
The Receipts and Payments Account is a summary of the cash book over a particular period of time, usually a year. It shows all the cash and bank transactions of a non-profit organization during that period, including the receipts and payments of both capital and revenue nature. Therefore, the correct answer is (B) cash book. The receipts and payments account is not a summary of income and expenditure, balance sheet, or profit and loss. Rather, it is a summary of the cash book which records all the cash and bank transactions of the organization.
Question 7 Report
A company has two departments X and Y. Y transferred goods to X at a profit margin of 25%. ₦10,000 worth of goods was not sold at the end of the accounting period.
How much is the unrealized profit?
Answer Details
Question 8 Report
The recording phase of accounting is known as?
Answer Details
The recording phase of accounting is known as bookkeeping. It involves the systematic and accurate recording of all financial transactions that occur within a business, such as sales, purchases, expenses, and payments. Bookkeeping typically involves the use of journals and ledgers to record these transactions and ensure that they are properly categorized and accounted for. The purpose of bookkeeping is to provide a clear and accurate picture of a business's financial position, which is essential for making informed decisions, preparing financial statements, and complying with tax laws and regulations. While trial balancing, ledger accounting, and final accounting are all important aspects of accounting, they are not the same as the recording phase, which specifically refers to the process of bookkeeping.
Question 9 Report
Use the information below to answer question.Ezekiel Malgwi is a retailer. He recorded sales representing 95% cash and 5% credit. He took the total cash sales of ₦19000 from the business tray and banked it.The transaction would be recorded in the cash book as debit?
Answer Details
Question 10 Report
Given:Capital ...........₦1000
Liabilities........₦500
Assets.............₦1500
The accounting equation can be expressed as?
Question 11 Report
For the purpose of conversion of a partnership to a company, a total purchase consideration of ₦3.6m was paid. If 30% of the purchase consideration was in cash and the rest by 50k shares, how many shares issued?
Answer Details
Question 12 Report
Use the information below to answer question.Ezekiel Malgwi is a retailer. He recorded sales representing 95% cash and 5% credit. He took the total cash sales of ₦19000 from the business tray and banked it.
The credit sales for the period would be?
Answer Details
Since Ezekiel recorded sales representing 95% cash and 5% credit, we can assume that the total sales for the period are 100%. Therefore, if the total cash sales recorded were ₦19000, we can find the total sales as follows: Total sales = Total cash sales / Percentage of cash sales Total sales = ₦19000 / 0.95 = ₦20000 Now, we know that the total sales are ₦20000, and that 95% of this amount represents cash sales, which is ₦19000. Therefore, we can find the credit sales by subtracting the cash sales from the total sales: Credit sales = Total sales - Cash sales Credit sales = ₦20000 - ₦19000 = ₦1000 So, the credit sales for the period would be ₦1000.
Question 13 Report
four broad classifications of overheads are?
Answer Details
Overheads are the indirect expenses of a business that are not directly related to the production of goods or services but are necessary for the smooth running of the business. These expenses are divided into four broad classifications: production, selling, distribution, and administration. 1. Production overheads: These are the indirect costs associated with the production process, such as rent, utilities, and maintenance of plant and equipment. These costs are necessary for the production of goods or services and are allocated to the cost of production. 2. Selling overheads: These are the indirect costs associated with the sales department of a business, such as advertising, marketing, and sales commissions. These costs are necessary for the promotion and sale of goods or services and are allocated to the cost of sales. 3. Distribution overheads: These are the indirect costs associated with the distribution of goods or services, such as transportation, warehousing, and packing materials. These costs are necessary for the delivery of goods or services and are allocated to the cost of distribution. 4. Administration overheads: These are the indirect costs associated with the general administration of the business, such as salaries of office staff, office rent, and office supplies. These costs are necessary for the smooth running of the business and are allocated to the cost of administration. Therefore, the correct answer to the question is option B: production, selling, distribution, and administration.
Question 14 Report
Use the information below to answer question .
Capital ...................₦2000
Bank ......................₦1200
Purchase ..................₦2500
Sales .....................₦6700
Stock .....................₦1300
Creditors .................₦1000
Fixed assets...............₦3700
Drawings ..................N?
Drawings are always estimated at 50% of capital.Compute the amount withdrawn
Answer Details
The question states that "Drawings are always estimated at 50% of capital." Since the capital is given as ₦2,000, we can assume that the amount of drawings taken by the owner is half of this amount, or ₦1,000. Therefore, the answer is option (D) ₦1,000. This calculation is based on the assumption that the estimated percentage of drawings is always 50% of the capital. However, in practice, this may not be accurate for all businesses and owners.
Question 15 Report
Given:
(i) Order of performance
(ii) Order of liquidity
(iii)Vertical order
(iv) Horizontal order
The order in which a balance assets is arranged are?
Answer Details
Question 16 Report
Use the information below to answer questions .Motor Vehicle Account as at 31st December 2001.
Debit:
Jan. 1, cost ................₦1950 000
Dec.31, Addition ............ ₦400 000
Credit:
Jan. 1, Depreciation ........₦1360 000
June 30, Sales proceeds...... ₦700 000
The vehicle sold was purchase on January 1, 1998 at a cost of ₦1,000 000 and had depreciation at 25% on cost.Assuming that depreciation is charged on the addition of the year at the rate of 15% on reducing balance, what should be the net book value of the vehicle as at 31st December 2003?
Question 17 Report
Which of the following is used to update the cash book in bank reconciliation?
Answer Details
Question 18 Report
Credit purchases are always put at 150% of the total cash paid to suppliers
Determine the credit purchases
Answer Details
Question 19 Report
The two legally recognized professional accounting bodies in Nigeria are the?
Answer Details
Question 20 Report
Use the information below to answer question Total sales of ticket.......................₦300 000
Amount received from the sales..............₦260 000
Cash purchase of club house.................₦100 000
Credit purchase of equipment ...............₦60 000
Electricity bill paid ......................₦5 000
Salaries owed ..............................₦2 000What is the balance of the income and expenditure account?
Answer Details
The balance of the income and expenditure account is ₦33,000, which is calculated by subtracting the total expenses from the total income. Total income from ticket sales is ₦300,000, but only ₦260,000 was received. Therefore, there is an outstanding receivable balance of ₦40,000. Total expenses are ₦167,000, calculated by adding the cash purchase of club house (₦100,000), credit purchase of equipment (₦60,000), electricity bill paid (₦5,000), and salaries owed (₦2,000). Subtracting the total expenses of ₦167,000 from the total income of ₦300,000 gives us ₦133,000. However, since only ₦260,000 was received, we need to add the outstanding receivable balance of ₦40,000 to get a balance of ₦293,000. Therefore, the balance of the income and expenditure account is ₦293,000.
Question 21 Report
Gross profit in the branch adjustment account is transferred to the branch?
Answer Details
The branch adjustment account is used to record any transactions or adjustments related to the branch, such as stock movements, expenses incurred, and revenue earned. The gross profit of the branch is calculated by preparing a trading account for the branch, which includes the revenue earned and the cost of goods sold. If there is a gross profit in the branch adjustment account, it means that the revenue earned by the branch was greater than the cost of goods sold, resulting in a profit. This gross profit needs to be transferred to the branch account, which is the account used to record all transactions related to the branch. The branch account can be a part of either the profit and loss account or the income and expenditure account, depending on the nature of the organization. The transfer of gross profit from the branch adjustment account to the branch account will increase the profit in the branch account and will be reflected in the overall financial statements of the organization. Therefore, the correct answer is profit and loss account.
Question 22 Report
Income and expenditure account is more informative than receipts and payments account because it discloses?
Answer Details
Question 23 Report
Advertising expenses incurred on a product in a business organization should be charged to?
Answer Details
Advertising expenses incurred on a product in a business organization should be charged to the sales department. The reason for this is that advertising is a part of the selling process, and its purpose is to increase sales and revenue for the company. Therefore, it makes sense for the advertising expenses to be accounted for in the same department that is responsible for generating those sales. Charging advertising expenses to the production department or the purchases department would not be appropriate because those departments are primarily responsible for creating or acquiring the products, not selling them. Similarly, charging advertising expenses to the administration department would not be appropriate because that department is generally responsible for supporting the overall operation of the company, rather than the specific activities of any one department.
Question 24 Report
The transaction that completes its double entry in the same ledger account appears in?
Answer Details
The transaction that completes its double entry in the same ledger account appears in the cash account and bank account. Double entry accounting is a system of recording financial transactions where every transaction affects at least two accounts - one account is debited and another account is credited. This ensures that the accounting equation (assets = liabilities + equity) remains balanced. In the case of a transaction completing its double entry in the same ledger account, it means that both the debit and credit entries of the transaction are made in the same account. This can only happen in the cash account and bank account since they are the only two ledger accounts that can have both debit and credit entries. For example, if a company withdraws $500 cash from their bank account, the double entry for this transaction would be a debit of $500 in the cash account and a credit of $500 in the bank account. Both entries are made in different accounts, but in this case, they complete their double entry in the same ledger account, which is the bank account.
Question 25 Report
Use the information below to answer question .
...........PQ Manufacturing Company
Raw materials (1/11/2001)...........₦3 500
Raw materials (31/12/2001)..........₦4 900
Purchase of raw materials...........₦56 000
Salary .............................₦63 000
Wages...............................₦148 000
Factory lighting ...................₦3 080
Plant Depreciation..................₦2 800
Factory Insurance ..................₦2 170
The overhead cost is?
Answer Details
Question 26 Report
Given:
Cost of raw materials issued to production.....₦37000
Opening stock of raw material..................₦2000
Purchases of raw material......................₦3800
Wages .........................................₦500
What is the closing stock of raw material?
Answer Details
Question 27 Report
Use the information to answer this question...............ZEBRA PLC..............
.............Balance sheet as at 31st March, 2002
...............N...............N............N......
Capital......100,000...Fixed assets:
Current................Land &..................
Liabilities...........buildings..50,000......
Creditors........30000..Furniture..10,000....60,000
.......................Current..................
.......................Assets: .......
..................Stock .........30,000...........
..................Debtors.......30,000.............
..................Cash..........10,000......70,000..
.............130,000.........................130,000
The business was acquired on 1st April, 2002 at a purchase consideration of ₦120,000 by SOZ. All assets and liabilities were taken over except the cash to open the new firm's bank account additional ₦20,000 was paid into the bank.Calculate the network of the business
Answer Details
Question 28 Report
Use the information below to answer question .
Capital ...................₦2000
Bank ......................₦1200
Purchase ..................₦2500
Sales .....................₦6700
Stock .....................₦1300
Creditors .................₦1000
Fixed assets...............₦3700
Drawings ..................N?
Drawings are always estimated at 50% of capital.
The trial balance total is?
Question 29 Report
Which of these is a capital expenditure warrant?
Answer Details
A warrant is a document that authorizes the payment of funds for a particular purpose. In accounting, warrants are often used to authorize expenditures for different purposes. Capital expenditures are expenditures that are made to acquire or improve long-term assets, such as property, plant, and equipment, and are not intended to be consumed in the short term. Examples of capital expenditures include the purchase of land, buildings, machinery, and equipment. Out of the given options, the Development fund general warrant is more likely to be a capital expenditure warrant. Development funds are typically used to finance long-term capital projects such as the construction of new buildings, roads, and other infrastructure projects that are expected to provide benefits over a period of several years. Therefore, a Development fund general warrant would likely be used to authorize capital expenditures. Provisional general warrants, Reserved expenditure general warrants, and Supplementary warrants are types of warrants that may be used to authorize different types of expenditures, but they are not specifically related to capital expenditures. Therefore, the correct answer is Development fund general warrant.
Question 30 Report
Credit purchases are always put at 150% of the total cash paid to suppliers
Calculate the closing balance of the ledger account
Question 31 Report
In a control account, provision for bad debts is found on the?
Answer Details
In a control account, provision for bad debts is found on the credit side of the sales ledger control account. The provision for bad debts is an estimated amount that a company sets aside to cover potential losses from customers who do not pay their debts. It's considered an expense and is recorded on the credit side of the sales ledger control account, which is a summary of all the transactions related to sales. By recording the provision for bad debts on the credit side of the sales ledger control account, the company reduces the overall value of its accounts receivable (the money owed to it by customers), as the provision is considered a reduction of the expected amount that will be collected. It's important to note that the provision for bad debts is an estimated amount, and the actual amount of bad debts may be different. As such, the provision may need to be adjusted in the future based on actual experience.
Question 32 Report
Given:
..............Rich Social Club...........
Cash.........................₦100,000
Loan ........................₦30,000
Subscription in arrears......₦5,000
Subscription in advance......₦15,000
What is the accumulation fund?
Question 33 Report
Use the information to answer this questionDate.............Details........................
Feb........1 Purchased 400 units at ₦1.00 each
,, ........5 Purchased 200 units at ₦2.00 each
,,.........10 Purchased 200 units at ₦300 each
,, .........15 Issued 320 units
,,..........20 Issued 200 units at ₦4,00 each
,,..........25 Issued 120 unitsCalculate the price per unit of closing stock using the periodic weighted average method.
Question 34 Report
Use the information below to answer the question:
| Total sales of ticket | ₦300 000 |
| Amount received from the sales | ₦260 000 |
| Cash purchase of club house | ₦100 000 |
| Credit purchase of equipment | ₦60 000 |
| Electricity bill paid | ₦5 000 |
| Salaries owed | ₦2 000 |
What is the receipts and payment account balance?
Answer Details
Question 36 Report
Use the information to answer this questionDate.............Details........................
Feb........1 Purchased 400 units at ₦1.00 each
,, ........5 Purchased 200 units at ₦2.00 each
,,.........10 Purchased 200 units at ₦300 each
,, .........15 Issued 320 units
,,..........20 Issued 200 units at ₦4,00 each
,,..........25 Issued 120 unitsUsing the periodic simple average method, the cost per unit is
Answer Details
Question 37 Report
Given:
(i) the consolidation revenue fund balance b/d..₦650 000
(ii) issue from contingency fund amount to......₦240 000
(iii) amount transferred to contingency fund is.₦210 000
What is the consolidation revenue fund balance?
Answer Details
Question 38 Report
Use the information below to answer question Goods from head office................₦13,400
Returns to head office ...............₦118
Rates and insurance paid .............₦188
Wages paid ...........................₦913
Cash remitted to head office..........₦16,625
Stock at 1/1/2000.....................₦1,875
Rents paid ...........................₦325
Stock at 31/12/2000 ..................₦1,975
Sundry expenses ......................₦200What is the total expenses?
Question 39 Report
Use the information below to answer question ............PQ Manufacturing CompanyRaw materials (1/11/2001)...........₦3 500
Raw materials (31/12/2001)..........₦4 900
Purchase of raw materials...........₦56 000
Salary .............................₦63 000
Wages...............................₦148 000
Factory lighting ...................₦3 080
Plant Depreciation..................₦2 800
Factory Insurance ..................₦2 170The company consumed raw materials worth?
Answer Details
Question 40 Report
Use the information below to answer this questions
Capital..................N............N........
Land and building.......18470........24000....
Mortgage on premises...................11090...
Drawings...............3000...................
Profit and loss........................3600...
Furniture and fittings...5120.................
Motor Vehicles...........3462................
Closing Stock............3000................
Debtors..................11474...............
Creditors..............................7354.
Cash.....................1518................
..........................46044.........46044
What is the capital employed?
Question 41 Report
Use the information below to answer this questions Capital..................N............N........
Land and building.......18470........24000....
Mortgage on premises...................11090...
Drawings...............3000...................
Profit and loss........................3600...
Furniture and fittings...5120.................
Motor Vehicles...........3462................
Closing Stock............3000................
Debtors..................11474...............
Creditors..............................7354.
Cash.....................1518................
..........................46044.........46044Calculate the value of fixed assets
Answer Details
The value of fixed assets is the sum of the value of land and building, furniture and fittings, and motor vehicles. Adding the value of land and building, furniture and fittings, and motor vehicles, we have: 18470 + 5120 + 3462 = ₦27,052 Therefore, the value of fixed assets is ₦27,052.
Question 42 Report
Use the information below to answer question Goods from head office................₦13,400
Returns to head office ...............₦118
Rates and insurance paid .............₦188
Wages paid ...........................₦913
Cash remitted to head office..........₦16,625
Stock at 1/1/2000.....................₦1,875
Rents paid ...........................₦325
Stock at 31/12/2000 ..................₦1,975
Sundry expenses ......................₦200The profit realized from the trade is?
Answer Details
Question 43 Report
The necessary accounts to be opened on the issue of ordinary share capital are?
Answer Details
Question 44 Report
Given:Total debtors b/d 31/12/99...............₦25 000
Cheques received from debtors ...........₦255 000
Total debtors c/d 31/12/00...............₦15 000Determine the sales figure?
Answer Details
Question 46 Report
A company has departments M and N. The expenses incurred wholly in M is ₦5000. General expenses incurred amount to₦25000. Expenses are apportioned in the ratio 2:3 for departments M and N respectively.
What is N's share of the expense?
Answer Details
The total expenses incurred by the company include expenses that are wholly incurred by department M and general expenses that are to be apportioned between department M and department N. The expenses incurred wholly in M is ₦5000, and the general expenses incurred amount to ₦25000. To apportion the expenses between departments M and N, we need to determine the total ratio, which is 2 + 3 = 5. This means that for every ₦5 spent, ₦2 is spent on department M, and ₦3 is spent on department N. To find N's share of the expenses, we first need to calculate the total expenses that are to be apportioned between departments M and N. This is ₦25000, the general expenses incurred. To determine department N's share, we need to multiply the total expenses by the ratio that represents department N's share, which is 3/5. N's share of the expenses is, therefore, 3/5 * ₦25000 = ₦15000. Therefore, the correct answer is ₦15000.
Question 47 Report
The first step in converting as single entry to a double entry system of bookkeeping is to prepare a?
Question 48 Report
Use the information below to answer questions .Motor Vehicle Account as at 31st December 2001.
Debit:
Jan. 1, cost ................₦1950 000
Dec.31, Addition ............ ₦400 000
Credit:
Jan. 1, Depreciation ........₦1360 000
June 30, Sales proceeds...... ₦700 000
The vehicle sold was purchase on January 1, 1998 at a cost of ₦1,000 000 and had depreciation at 25% on cost.What is the actual profit or loss arising from the vehicle disposed of?
Question 49 Report
The stock valuation data is important because it enables management to?
Question 50 Report
During the year ended 31st December 2001,
Nuju Enterprises paid rent as follows:
Jan. 20, ₦24 000 for a period of 4 months.
May. 16, ₦30 000 for a period of 5 months.
Oct. 15, ₦36 000 for a period of 6 months.What is the overpaid portion of the rent?
Answer Details
To find the overpaid portion of the rent, we need to calculate the total rent paid and compare it to the rent that would have been paid if it had been paid monthly for the entire year. The rent paid for 4 months in January is ₦24,000. This means that the monthly rent is ₦6,000 (₦24,000 ÷ 4). The rent paid for 5 months in May is ₦30,000. This means that the monthly rent is ₦6,000 (₦30,000 ÷ 5). The rent paid for 6 months in October is ₦36,000. This means that the monthly rent is ₦6,000 (₦36,000 ÷ 6). To find the rent that would have been paid if it had been paid monthly for the entire year, we need to multiply the monthly rent by 12: Yearly rent = Monthly rent x 12 Yearly rent = ₦6,000 x 12 Yearly rent = ₦72,000 Now we can calculate the total rent paid by adding up the amounts paid in January, May, and October: Total rent paid = ₦24,000 + ₦30,000 + ₦36,000 Total rent paid = ₦90,000 To find the overpaid portion of the rent, we need to subtract the yearly rent from the total rent paid: Overpaid portion = Total rent paid - Yearly rent Overpaid portion = ₦90,000 - ₦72,000 Overpaid portion = ₦18,000 Therefore, the overpaid portion of the rent is ₦18,000. So the correct answer to the question is option B: ₦18,000.
