JAMB UTME - Principles of Accounts - 2023

Income and Expenditure account is the same as the --------- of a sole trader

Answer Details

The correct answer is profit and loss account.
The Income and Expenditure account is the same thing as the profit and loss account for a sole trader.
The profit and loss account shows all the revenue and expenses incurred by the sole trader during a specific period of time, usually a year. It includes all the sales or income earned by the sole trader, as well as the costs and expenses incurred in running the business.
The revenue or income includes sales from products or services, any interest earned, and other sources of income. The expenses include costs incurred in producing or providing the products or services, wages or salaries of employees, rent, utilities, and other operating expenses.
By subtracting the total expenses from the total revenue, the profit or loss for the sole trader can be calculated. If the revenue is higher than the expenses, it represents a profit, while if the expenses exceed the revenue, it represents a loss.
In summary, the profit and loss account, or the Income and Expenditure account, for a sole trader shows the financial performance of the business by summarizing the revenues and expenses over a specific period. It helps the sole trader assess the profitability of the business and make informed decisions.

Calculate the cost of raw materials consumed

Answer Details

To calculate the cost of raw materials consumed, we need to consider the stock of raw materials at the start of the year, any purchases made during the year, and the stock of raw materials at the end of the year. Given the following information: Stock on 1/1/16: ₦1,000 Purchases: ₦16,000 Stock on 31/12/16: ₦1,400 We can calculate the cost of raw materials consumed using the following formula: Cost of raw materials consumed = Opening stock + Purchases - Closing stock Substituting the values: Cost of raw materials consumed = ₦1,000 + ₦16,000 - ₦1,400 Simplifying the calculation: Cost of raw materials consumed = ₦16,600 Therefore, the cost of raw materials consumed is ₦16,600. So the correct answer is option: - ₦15,600

Dr. Sales Ledger Control Account . Cr
 

The amount ₦19,075 represents

Answer Details

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

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

Answer Details

Change in profit sharing ratio may occur as a result of the following:
- changes in skill contributed by partners
- ill health
- old age

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.
 

- 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

Answer Details

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.

Which of the following is found on the credit side of a profit and loss account?

Answer Details

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.

The discount column on the left-hand side of cash book represents a discount

Answer Details

In a cash book, the discount column on the left-hand side does not represent a discount. The purpose of this column is to record any discounts that are allowed to a debtor. When a debtor pays their outstanding debt earlier than the due date, the creditor may offer them a discount as an incentive for early payment. This discount is recorded in the discount column on the left side of the cash book.
Therefore, the correct answer is "allowed to a debtor."

Which of the following concepts recognizes the principle of double entry?

Answer Details

The concept that recognizes the principle of double entry is **dual aspect**. In simple terms, double entry accounting is a system that records all financial transactions for a business in at least two different accounts. These accounts are known as the debit and credit side. The dual aspect concept is based on the idea that every transaction has two effects - it affects one account by debiting it and another account by crediting it. For example, let's say a company receives cash for the sale of a product. In this transaction, the company's cash account is increased (debited) because it receives cash, and its sales revenue account is increased (credited) because it generates revenue from the sale. By following the dual aspect concept, all financial transactions are recorded in a systematic way, ensuring that the accounting equation remains in balance. The accounting equation states that assets equal liabilities plus equity. This means that for every debit entry, there must be an equal and opposite credit entry, keeping the equation in equilibrium. The dual aspect concept is essential for accurate financial reporting and allows businesses to track their assets, liabilities, and equity in a structured and reliable manner. It helps ensure the integrity and completeness of financial information.

The document which is legal charter of a company that defines the limits of a company's field of operation is known as

Answer Details

The document that serves as the legal charter of a company and defines the boundaries of its operations is known as the memorandum of association. This document outlines the company's objectives, activities, and powers, as well as its relationship with shareholders and the outside world. It acts as a guidebook for the company's existence and sets the rules and regulations by which the company must abide. In simpler terms, the memorandum of association is like the Constitution of a country, as it establishes the framework and scope within which the company operates.

Answer Details

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.

Answer Details

Prime cost = Cost of raw materials consumed + Manufacturing wages + Royalties
= 15600 + 42000 + 300
= ₦57,900

The effect of transaction when cash is paid into the bank is?

Answer Details

When cash is paid into the bank, the effect on the transaction is that **the bank balance increases and the cash balance decreases**. Let's break it down step by step: 1. When cash is paid into the bank, we are essentially depositing money into our bank account. This means that the money is moving from our possession (cash balance) to the bank. 2. As the cash balance decreases, our bank balance increases. The bank keeps track of the money we deposit and adds it to our account balance. So, to summarize, when cash is paid into the bank, the bank balance increases because the bank is receiving the money, and the cash balance decreases because we no longer have the cash in our possession.

Discount allowed is enjoyed by

Answer Details

Discount allowed is a benefit that is enjoyed by customers. When a company offers a discount, it means they are reducing the usual price of a product or service. This reduction in price is given to the customers as an incentive to encourage them to make a purchase. Discounts can be given for various reasons, such as promotional offers, seasonal sales, or loyalty programs. By offering discounts, companies aim to attract more customers and make their products or services more affordable and appealing. Managers, staff of the company, and suppliers do not directly benefit from the discount allowed. While managers may strategize and set the discount policies, it is ultimately the customers who get to enjoy the discounted prices. Therefore, when it comes to discounts, it is the customers who receive the advantage of reduced prices, making it a benefit enjoyed by them.

Subscription in advance is treated in the balance sheet as a

Answer Details

Subscription in advance is treated in the balance sheet as a current liability.
This is because subscription in advance represents money that has been paid by customers for products or services that will be delivered or rendered at a future date. Since the provision of these products or services has not yet occurred, the company has an obligation to fulfill this commitment in the future.
As a current liability, subscription in advance is considered a short-term obligation that is expected to be settled within the next operating cycle, typically within one year. It is categorized as a liability because the company owes a future performance to its customers.
On the balance sheet, current liabilities are listed under the liabilities section and represent obligations that are expected to be settled in the near future using current assets or by creating new liabilities. Examples of other current liabilities include accounts payable, accrued expenses, and short-term loans.
It is important for companies to accurately present subscription in advance as a current liability on the balance sheet, as it reflects the company's financial obligations and helps provide a clearer picture of its overall financial health and future cash flow obligations.

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:

Answer Details

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

Determine the net profit

Answer Details

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

Danladi Bako's Statement of Affairs as at 30/06/17
 

What is the value of Dalandi Bako's capital?

Answer Details

The capital is calculated as the difference between total assets and total liabilities. Therefore, the correct answer is ₦60,650.

One of the options below have the same features as the profit and loss account in non-profit organization

Answer Details

In a non-profit organization, the income and expenses are recorded in a specific financial statement called the "income and expenditure account." This account is similar to the profit and loss account in a profit-oriented organization because it serves the same purpose of tracking financial activities and determining the financial position of the organization.
Just like the profit and loss account, the income and expenditure account shows the income and expenses of the non-profit organization over a specific period. It helps to calculate whether the organization has made a surplus (income exceeding expenses) or a deficit (expenses exceeding income).
The income and expenditure account: - Records all the revenues and gains received by the non-profit organization during a particular period, including donations, grants, membership fees, and program revenues. - Itemizes all the expenses and losses incurred by the organization, such as salaries, rent, utilities, insurance, and other operational costs. - Calculates the net surplus or deficit by subtracting the total expenses from the total income. A surplus indicates that the organization has generated more income than it has spent, while a deficit suggests that the expenses have exceeded the income. - Provides valuable insights into the overall financial health and sustainability of the non-profit organization.
Therefore, of the given options, income and expenditure account is the one that shares the same features as the profit and loss account in a non-profit organization.

Answer Details

To calculate the amount of preference shares dividends payable at the end of the year, we need to consider the number of preference shares and the dividend rate. In the given information, we know that Larry Limited has 150,000 preference shares of ₦1 each fully paid. The dividend rate for these preference shares is mentioned as 5%. To calculate the total dividend payable for the preference shares, we can multiply the number of preference shares by the dividend rate. 150,000 preference shares x 5% dividend rate = 7,500. Therefore, the amount of preference shares dividends payable at the end of the year is ₦7,500.

The following appears in the trading account except

Answer Details

The item that does not appear in the trading account is **carriage outward**. The trading account is a financial statement that shows the calculation of gross profit or loss by comparing the value of goods bought (cost of goods sold) with the value of goods sold (sales). Let's break down the other three options: 1. **Carriage inward**: This refers to the transportation cost incurred to bring goods into the business. It is considered as part of the cost of goods sold, as it directly relates to acquiring the goods for sale. 2. **Opening stock**: This represents the value of goods held in the beginning of the accounting period, before any sales or purchases. It is included in the trading account as it helps determine the cost of goods sold. 3. **Sales**: This represents the total revenue generated from selling goods or services. It is a crucial component of the trading account since it represents the value of goods sold during the period. However, **carriage outward** does not belong in the trading account. It refers to the transportation cost incurred when delivering goods to customers. Carriage outward is not directly related to the cost of goods sold or the calculation of gross profit/loss. Therefore, it is not included in the trading account. In summary, the trading account includes carriage inward, opening stock, and sales, while carriage outward is not part of it.

Which of the following is recorded in the folio column of the journal?

Answer Details

The folio column in a journal is used to record the page number or reference of the ledger account where the transaction is being posted. It helps in linking the journal entry to the specific account in the ledger. So, out of the given options, the **particulars of transactions** are recorded in the folio column of the journal. The particulars describe the details of the transaction, such as the accounts involved, the description of the transaction, and any additional information related to the transaction. The **date of entries** is usually recorded in a separate column in the journal to track when the transaction occurred. The option **all credit and cash sales transactions** is not directly related to the folio column. It is more about the type of transactions being recorded, not where they are being posted. Lastly, the **amount of money posted** is typically recorded in the respective debit or credit column of the journal, depending on whether it is a debit or credit transaction. Overall, the folio column in the journal is specifically used for recording the reference to the relevant account in the ledger where the transaction is being posted.

Which of these is not method of stock valuation?

Answer Details

The methods of stock valuation are: FIFO, LIFO, Weighted Average Price Method, Simple Average Price Method, Base stock method.

The balance as per bank statement is

Answer Details

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.

Which of the following is used in the public sector to monitor or control government expenditure?

Answer Details

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.

When starting with the cash book balance in preparing the bank reconciliation statement, the followings are added except

Answer Details

When starting with balanace as per cash book, unpresented cheques, dividend, credit transfers are added while uncredited cheques, bank charges, dishonoured cheuqes, standing order are substracted.

Salaries in arrears is treated in the balance sheet as a

Answer Details

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.

The authority warrant issued prior to the approval of the appropriate bill at the begining of the year

Answer Details

The correct answer is **provisional general warrant**. A provisional general warrant is issued by the authority at the beginning of the year to allow for the necessary expenses before the approval of the appropriate bill. It serves as a temporary authorization to spend money until the formal annual general warrant is approved. The purpose of this warrant is to ensure that essential and urgent expenditures can be made in a timely manner, even without the formal approval of the bill. It helps to prevent delays in government operations and ensures that necessary services are not interrupted due to the lack of a finalized budget. The provisional general warrant is not a long-term solution, and it is eventually replaced by the annual general warrant once the bill is approved. The annual general warrant provides a more comprehensive and detailed allocation of funds for the entire fiscal year. In summary, the provisional general warrant allows for necessary expenses at the beginning of the year until the appropriate bill is approved, ensuring the smooth operation of government services.

Answer Details

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.

The principle of double entry developed from the axioms of accounting equation is given as

Answer Details

The accounting equation states that:
- Capital( Equity) = Assets - Liabilities
- Assets = Capital (Equity) - Liabilties
- Liabilties = Assets - Capital (Equity)
- Equity(Capital ) = Assets

The accounting system in which only one aspect of transaction is recorded is

Answer Details

The accounting system in which only one aspect of a transaction is recorded is called single entry accounting. In this system, only the cash or assets received or paid are recorded, without recording the corresponding liabilities or expenses. In single entry accounting, each transaction is recorded only once, typically in a single column cash book. This means that there is no systematic tracking of the financial impact of transactions on both sides of the equation (assets = liabilities + equity). It is important to note that single entry accounting is generally considered less comprehensive and reliable compared to double entry accounting. Double entry accounting, on the other hand, is a more complete and accurate system where each transaction is recorded twice—once as a debit and once as a credit. This allows for a better understanding of the financial health of a business and provides a basis for generating accurate financial statements. Overall, single entry accounting is a simpler but less robust approach to recording financial transactions, as it does not provide a complete picture of a company's financial position and performance.

A double entry for a transaction that offsets one amount against another on both sides of the cashbook is a

Answer Details

A double entry for a transaction that offsets one amount against another on both sides of the cashbook is called a contra entry.
A contra entry is used when there is a need to record two opposite and equal transactions simultaneously in the books of accounts. In other words, it involves recording an amount on the debit side and an equal amount on the credit side of the cashbook.
The purpose of a contra entry is mainly to highlight the cancellation or offsetting of a previous entry. This type of entry helps to accurately track and reconcile transactions that involve the movement of funds within the same account or between different accounts.
For example, let's say that a company needs to withdraw cash from its bank account to pay off a loan. In this case, a contra entry would be made to reflect both sides of the transaction. The cash withdrawal would be recorded as a debit in the cashbook, representing the decrease in cash, and as a credit in the bank account, representing the decrease in the outstanding loan.
Contra entries are essential for maintaining the accuracy and integrity of financial records. They ensure that all debit and credit transactions are properly recorded, allowing for accurate financial reporting and analysis.

The account where the profit are distributed to the partner in their profit sharing ratio in partnership

Answer Details

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.

The use of three column cash book is determined by

Answer Details

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.

Given:

I. Settlement of debts
II. Cessation of business
III. Introduction of assets
IV. Disposal of assets

Which of these constitutes dissolution of partnership?

Answer Details

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.

Answer Details

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.

The short term solvency of a company is determined with ------- ratio

Answer Details

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.

Which fund is used to meet unforeseen or urgent expenditure

Answer Details

The fund that is specifically set aside to meet unforeseen or urgent expenditure is called the **contingencies fund**. The purpose of this fund is to provide financial resources for unexpected and urgent expenses that may arise during the year. These expenses could be related to emergencies, natural disasters, or any unforeseen circumstances that require immediate attention. The contigencies fund acts as a safety net, allowing the government or organization to swiftly address these unforeseen situations without having to wait for the regular budgetary process. It provides the flexibility and financial capability to handle urgent needs that cannot be foreseen or planned in advance. The main characteristic of the contigencies fund is that it is available for quick access and is not subject to the typical budgetary constraints. This ensures that the necessary funds are readily available in times of emergency, enabling prompt action and timely response. In summary, the contigencies fund is a dedicated fund that caters to unforeseen or urgent expenditure, providing the necessary financial resources to deal with unexpected situations efficiently and effectively.

Capital for a profit making organization is generated through

Answer Details

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.

A part of public company's profit belonging to the shareholders is

Answer Details

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.

Danladi Bako's Statement of Affairs as at 30/06/17

 

What is his bank balance as at 30/06/17?

Answer Details

Bank balance = 78,650 - ( 4000 + 20500 + 40000)
= 78650 - 64500
= ₦14,150