JAMB UTME - Principles of Accounts - 2023

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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.

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Expenditure paid on bahalf of joint venture
Accountint entries:
Dr: Joint venture account
Cr: Bank account

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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.

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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.

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Depreciation of office machines in manufacturing is charged to the profit and loss account.
Depreciation is a method used to allocate the cost of an asset over its useful life. Office machines, such as computers, printers, and photocopy machines, are considered as fixed assets. These assets gradually lose their value and become less useful over time due to wear and tear or technological advancements.
When manufacturing companies calculate their annual expenses, they include the depreciation of their office machines as an expense in the profit and loss account. The profit and loss account records all the revenues and expenses incurred by a company during a specific period, such as a financial year.
By charging the depreciation of office machines to the profit and loss account, manufacturing companies accurately reflect the decrease in value of these assets over time. This allows them to calculate their net profit or loss for the period more accurately.
It is important to note that while depreciation is charged to the profit and loss account, the accumulated depreciation of office machines is shown as a contra-asset on the balance sheet. The balance sheet provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and shareholders' equity.
In summary, the depreciation of office machines in manufacturing is charged to the profit and loss account, reflecting the decrease in value of these assets over time and accurately calculating the net profit or loss for the period.

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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.

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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.

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Balance c/d = net profit + profit and loss - ( goodwill + ordinary share + preference share)
= (90,000 + 10,000) - ( 1000 + 25000 + 7500)
= 100,000 - 33500
= ₦66500

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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.

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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.

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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.

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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**.

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Goods received from head office
Accounting entries:
Dr: Purchase account
Cr: Head office current account

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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.

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The main purpose of a transaction file is to **record the individual transactions** that occur within an organization. It serves as a **detailed record** of all the financial activities and events that take place, including the buying and selling of goods and services, making payments and receiving payments, and any other actions that involve the organization's finances. The transaction file is important because it allows for the **accurate and up-to-date tracking** of changes in assets, liabilities, income, and expenses. Each transaction is recorded with specific details, such as the date, amount, parties involved, and the specific accounts that are affected. By **updating the master files** (which contain information about accounts, customers, products, etc.) based on the transactions recorded in the transaction file, the organization can maintain accurate and reliable information for decision-making and financial reporting purposes. In summary, the main purpose of a transaction file is to **record individual financial transactions** and use that information to **update master files** and provide an accurate and complete picture of an organization's financial activities. It is a crucial tool for effectively managing and understanding an organization's financial position.

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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.

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When the goods are sold on credit to a buyer, the account receivable account debits, increasing the company's assets as the amount is receivable from the third party. The corresponding credit will be in the sales account, increasing the company's revenue.

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Branch accounts are important tools that assist organizations in effectively managing their branch operations. They provide valuable information about the performance and profitability of each branch. However, **the importance of branch accounts does not include allowing fraud and wastage of resources**. Let's look at the other three options: 1. **Assisting the organization to determine the performance of a branch manager**: Branch accounts help evaluate the performance of a branch manager by providing detailed financial information about their branch. This can include sales revenue, expenses, and profit or loss generated by the branch. By analyzing this information, the organization can assess how well the branch manager is managing their resources and achieving targets. 2. **Enabling the organization to determine the branch that is making either profit or loss**: Branch accounts provide clear insights into the profitability or loss incurred by each branch. This information is crucial for decision-making purposes, such as whether to allocate additional resources, close an unprofitable branch, or implement measures to improve the performance of a struggling branch. 3. **Allowing proper control over the branch by the head office**: Branch accounts facilitate effective control and oversight of branch operations by the head office. By maintaining detailed financial records, the head office can monitor the financial performance of each branch, identify any irregularities, and take corrective actions when needed. This control ensures that the overall functioning of the branches is aligned with the organization's objectives and policies. In summary, while branch accounts are instrumental in evaluating branch manager performance, determining profitability, and ensuring control over branch operations, they do not permit fraud or wastage of resources.

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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.

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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.

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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.

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A journal is a book of original entry where all the financial transactions of a business are recorded in a chronological order. It serves as a primary record-keeping tool for accounting purposes. The main purpose of a journal is to provide a detailed record of each transaction that occurs in a business. This allows for accurate and transparent financial reporting and analysis. The journal typically has several headings to organize the information recorded. These headings include the date, debit, credit, and discount. - The "date" heading is used to record the date on which the transaction occurred. This is important for reference and to maintain a chronological order of the transactions. - The "debit" heading is used to record the amount of money or value that is going out of the business due to the transaction. This could include expenses, assets being sold, or liabilities being paid off. - The "credit" heading is used to record the amount of money or value that is coming into the business due to the transaction. This could include revenue, loans, or other sources of income. - Finally, the "discount" heading is used to record any discounts given or received during the transaction. Discounts are often given to customers as an incentive or to settle outstanding debts. Therefore, based on the given options, the heading that would not typically be found in a journal is "discount." This is because the journal mainly focuses on recording and summarizing financial transactions, and discounts are not directly related to the core financial operations of a business.

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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

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

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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.

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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.

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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.

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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.

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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.

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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**.

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In a manufacturing process, various expenses are incurred for producing goods. These expenses can be classified into two categories: direct expenses and indirect expenses. Direct expenses are those expenses that are directly related to the production process and can be easily identified with a specific product or job. They are charged to the manufacturing account because they directly contribute to the cost of production. Examples of direct expenses include raw materials, factory wages, and direct expenses. On the other hand, indirect expenses are those expenses that cannot be directly attributed to a specific product or job. These expenses are incurred to facilitate the overall manufacturing process but cannot be easily allocated to a specific product. Indirect expenses, such as distribution expenses, are not charged directly to the manufacturing account. Instead, they are accounted for separately in the general expenses or overhead account. Coming back to the question, out of the given options, **distribution expenses** is not charged to the manufacturing account. Distribution expenses include costs incurred for storing, packaging, and transporting finished goods to customers. While these expenses are essential for selling and distributing the products, they are not directly related to the manufacturing process itself. Therefore, they are not included in the manufacturing account, which focuses solely on the cost of production. In summary, raw materials, factory wages, and direct expenses are all charged to the manufacturing account because they directly contribute to the cost of production. Distribution expenses, on the other hand, are not charged to the manufacturing account as they are considered indirect expenses related to the selling and distribution of finished goods.

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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.

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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.

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

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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.

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

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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.

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A control account is a summary account that represents a group of similar transactions or balances. It is used to simplify the management and analysis of a large number of individual accounts. The advantage of a control account is that it provides a way to monitor and track the overall balance or activity within a group of related accounts. It helps to ensure accuracy and identify any discrepancies or errors. Now, let's analyze the options provided one by one to determine which one is NOT an advantage of a control account: 1. **Difficulty in committing fraud**: This is indeed an advantage of a control account. By consolidating and summarizing the information from multiple accounts, it becomes more difficult for individuals to manipulate or misrepresent the data for fraudulent purposes. 2. **It can be used to detect missing figures**: This is also an advantage of a control account. By comparing the total balance of the control account with the sum of the individual accounts it represents, any missing figures or discrepancies can be easily identified. 3. **Helps to determine profit and loss**: This is another advantage of a control account. By summarizing the transactions related to revenue and expenses, a control account can provide an overview of the profit or loss generated by a particular area or department. 4. **Helps in locating errors**: This is also an advantage of a control account. By comparing the balances of the control account with the detailed records, any errors or discrepancies can be quickly identified and addressed. Based on the analysis of the options, it can be concluded that the **difficulty in committing fraud** is not an advantage of a control account. In fact, it is an advantage because it makes it more difficult for fraud to occur.

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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."

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.