JAMB UTME - Principles of Accounts - 2006

A private company is different from a public company because?

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A private company is different from a public company because it cannot invite members of the public to subscribe for its shares. A private company is usually owned by a small group of individuals or family members who typically have a personal connection to the company. In contrast, a public company is owned by a larger number of shareholders who may or may not have a personal connection to the company. One of the key differences between a private and public company is the way they raise funds. A public company can issue shares to members of the public and can raise a significant amount of capital in this way. In contrast, a private company cannot offer its shares to members of the public for subscription. Instead, it must rely on its existing shareholders or other private sources of funding to raise capital. Another key difference is the level of disclosure required. Public companies are subject to more stringent reporting and disclosure requirements, including the requirement to file periodic financial reports with regulatory authorities. Private companies are generally subject to less regulation and have more flexibility in terms of their reporting requirements. In summary, a private company is a business that is owned by a small group of individuals and cannot invite members of the public to subscribe for its shares.

Assuming the closing stock was valued at N19 000 at the end of November, what was the gross profit?

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Determine the value of closing stock using the LIFO method

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A major factor that enhanced the early development of accounting is the?

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The growing of trade and commerce was a major factor that enhanced the early development of accounting. As trade and commerce expanded, the need to keep track of financial transactions became essential. Merchants needed to keep accurate records of their transactions to monitor their financial positions, profits and losses, and tax liabilities. This led to the development of accounting principles and practices. Accounting enabled merchants to keep track of their transactions and provided the necessary information for decision-making. Therefore, the growing of trade and commerce was a catalyst for the development of accounting as a profession.

which of the following is source of document for the preparation of debtors' ledger account?

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The source document for the preparation of the debtors' ledger account is the sales invoice. When a business sells goods or services on credit to a customer, a sales invoice is created as a source document to record the transaction. The sales invoice contains information such as the date of the sale, the amount of the sale, the name of the customer, and the terms of the credit sale. This information is then used to update the debtor's ledger account. The debtor's ledger account is a record of all the transactions between the business and the customer, and it shows the customer's outstanding balance at any given time. By using the sales invoice as the source document, the business can accurately record and track the amount owed by the customer, as well as any payments received and adjustments made. In contrast, a debit note is a document used to request payment from a customer who has an outstanding balance, a purchases invoice is used as a source document for the preparation of the creditors' ledger account, and a general journal is used for recording transactions that do not have a specific source document.

Stock 1/1/2002..................................₦40 000

Goods received from head office.................₦800 000

Goods returned to head office...................₦34 000

Sales...........................................₦916000

Stock 31/12/2000................................₦72 000

From the data above determine the cost of goods credited to the head office trading account.

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Stationary which will be used over a long period of time is usually recorded as an expense instead of an asset.

This concept is called?

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The concept referred to in the question is materiality. Materiality is an accounting principle that states that an item or transaction should be recorded and reported in the financial statements if it is material or significant enough to affect the financial statements' users' decision-making process. In the case of stationary that will be used over a long period of time, it is not material enough to be recorded as an asset because it will not have a significant impact on the financial statements. Therefore, it is recorded as an expense when it is used.

The objective of a trading account is to establish the?

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The objective of a trading account is to establish the gross profit earned or loss incurred by a business during a particular accounting period. It shows the direct expenses incurred in relation to the goods sold and the revenue earned from the sale of goods. Gross profit is calculated by subtracting the cost of goods sold from the net sales revenue. By subtracting other indirect expenses like operating expenses, taxes, and interest from gross profit, the net profit or loss of the business can be determined. Therefore, the correct option is "gross profit".

The difference in the sales ledger control account is transferred to the?

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On Jan. 30 Khalifa withdraw ₦2500 from the bank for office use.

The cash balance at end of the month was

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Use the information below were to answer questions

...................Stationary Dept.............Video Dept.

Sales ..............₦10,600.....................₦15,175

Cost of goods sold..₦5,247......................₦6704

The expenses incurred were rent ₦4500, motor repairs ₦1200 and telephone ₦900.

The basis of cost apportionment is 1/2 stationary 1/3 video.

Determine the net profit of the business?

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The use of a three-column cash book is determine by?

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Determine the opening cash balance of the club?

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Use the information below to answer questions .On January 1/2005, a machine was bought for ₦56,000 to last for five years with a residual value of ₦1000.Calculate the yearly depreciation expense using the straight line method.

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The yearly depreciation expense using the straight-line method is ₦11,000. To calculate this, you would start by subtracting the residual value (₦1000) from the initial cost (₦56,000) to get the total depreciation (₦55,000). Then, you divide the total depreciation by the useful life of the machine (5 years) to get the yearly depreciation expense, which is ₦11,000. This means that each year for the next five years, the value of the machine will decrease by ₦11,000 until it reaches its residual value of ₦1,000 at the end of its useful life.

Given:

Subscriptions received.........₦200 000

Subscriptions owed.............₦10 000

Subscriptions in advance.......₦25 000

Calculate the subscription in the income and expenditure account?

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Which of the following is a journal as well as a ledger?

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A seller of vegetables and fruits should be encouraged to value his stock at the end of a period using the?

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Adaobi mistakenly entered ₦7000 as credit sales in Abba's account. This is?

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The entry of ₦7000 as credit sales in Abba's account is an error of commission. An error of commission is an error that occurs when a transaction is recorded in the wrong account, but the debit and credit amounts are still equal. In this case, Adaobi entered the ₦7000 in the wrong account, as credit sales instead of another account, but the total debits and credits still balance. In contrast, an error of omission occurs when a transaction is not recorded at all, while an error of principle occurs when a transaction is recorded in the wrong category of account (e.g. as an asset instead of a liability). Finally, a compensating error occurs when two errors are made that cancel each other out, such as an overstatement of an asset and an overstatement of a liability by the same amount.

In converting a to a partnership company, the loss on asset revaluation is?

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Use the information below to answer question .

Capital.....................N?

Profit and loss.............₦3500

Current assets..............N?

Current liabilities.........₦2000

Fixed assets................₦11000

Determine the current assets?

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The subscriptions received represent 80% of total payments and the opening balance is 30% of gate-fee collections.

What is the closing cash balance?

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Tunde purchased goods from Femi by cash worth ₦1000 with 10% cash discount. Tunde's ledger control account is to be?

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Use the information below to answer question .Prime cost..................₦12 100

Lighting....................₦10 000

Heating.....................₦15 000

Factory overhead............?The production department share of factory overhead is 1/4 and 1/2 of lighting and heating respectively.

Interest on the drawings of partners is treated in the?

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The objective of the purchase ledger control account is to established the?

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Use the information below to answer questions Turnover...........................?120 000 Net profit before tax..............?40 000 Net profit b/f.....................?68 000 Proposed dividends: Ordinary shares....................?8 000 Preference shares..................?6 000 Corporate tax is 30%...............?10 000

What is the tax charged to profit and loss account?

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The value of Y is

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To find the value of Y, we need to calculate the total credits and debits up to Jan. 30, and then subtract the total debits from the total credits to get the final balance, which is equal to Y. Total Credits = Opening Balance + Aliyu A.K.'s payment = ₦10,000 + ₦3,000 = ₦13,000 Total Debits = Bashir A.K.'s payment + Usman A.D.'s payment + Sule A.S.'s payment + X's payment = ₦1,000 + ₦1,500 + ₦500 + ₦1,500 = ₦4,500 Final balance = Total Credits - Total Debits = ₦13,000 - ₦4,500 = ₦8,500 Therefore, the value of Y is ₦8,500.

Use the information below to answer question .

Prime cost..................₦12 100

Lighting....................₦10 000

Heating.....................₦15 000

Factory overhead............?

The production department share of factory overhead is 1/4 and 1/2 of lighting and heating respectively.

The factory overhead is?

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To find the factory overhead, we need to first determine the production department's share of the lighting and heating costs. The lighting cost is ₦10,000, and the production department's share is 1/4, so their portion of the lighting cost is: 1/4 x ₦10,000 = ₦2,500 The heating cost is ₦15,000, and the production department's share is 1/2, so their portion of the heating cost is: 1/2 x ₦15,000 = ₦7,500 Therefore, the total production department's share of the overhead cost is: ₦2,500 + ₦7,500 = ₦10,000 We can now find the factory overhead by subtracting the prime cost and the production department's share of the overhead from the total cost of lighting and heating: Total cost of lighting and heating = ₦10,000 + ₦15,000 = ₦25,000 Factory overhead = ₦25,000 - ₦12,100 - ₦10,000 = ₦2,900 Therefore, the factory overhead is ₦2,900. Answer option (iv) is the closest to this value.

Motor: ₦10 000
Fixtures: ₦5 000
Cash: ₦2 500
Creditors: ₦7 000
Loan: ?

LOAN IS 30% OF CREDITORS.

What is the capital balance?

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Departmentalization of accounts is useful because it shows the?

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Departmentalization of accounts is useful because it shows the overall performance of a division. By dividing the company into departments, each department's performance can be tracked and analyzed separately. This can help in identifying the strengths and weaknesses of each department and finding ways to improve their performance. Departmentalization also allows for better cost control and helps in determining the profitability of each department. Overall, departmentalization of accounts provides useful insights into the performance of different segments of the company, which can be used to make informed decisions and improve overall company performance.

Head office sends goods to its branch at cost plus mark-up of of 25%. A debit of ₦40,000 to the branch stock account in the head office books will indicate that the head office has sent goods with a profit of

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If the head office sent goods to its branch at cost plus a mark-up of 25%, it means that the selling price to the branch is 125% of the cost price. To find the cost price of the goods, we need to divide the debit of ₦40,000 by 1.25, which is the same as multiplying it by 0.8 (since 1/1.25 = 0.8). Therefore, Cost Price = ₦40,000/1.25 = ₦32,000. The profit made by the head office on this transaction is the difference between the cost price and the selling price. Selling Price = Cost Price + Mark-up = ₦32,000 + (25% x ₦32,000) = ₦40,000. Profit = Selling Price - Cost Price = ₦40,000 - ₦32,000 = ₦8,000. Therefore, the answer is ₦8,000.

Use the information below to answer questions

Turnover...........................₦120 000

Net profit before tax..............₦40 000

Net profit b/f.....................₦68 000

Proposed dividends:

Ordinary shares....................₦8 000

Preference shares..................₦6 000

Corporate tax is 30%...............₦10 000

The undistributed profit carried forward is?

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Gross earnings........................?950 000

Current liabilities...................?100 000

Operating expenses....................?350 000

10% debentures........................?400 000

Shareholder's fund....................?1300 000

Corporate tax is 30%

From the data above calculate the returns on equity?

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Use the information below to answer question

Capital.................................₦60 000

Bank....................................₦12 500

General expenses........................₦5 250

Creditors...............................₦17 000

Stock...................................₦98 500

Fixed assets............................₦42 000

Insurance and rates.....................₦18 800

Purchase................................₦63 850

What is the cash balance on the debit side if it is the only item omitted?

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Use the information below were to answer questions

...................Stationary Dept.............Video Dept.

Sales ..............₦10,600.....................₦15,175

Cost of goods sold..₦5,247......................₦6704

The expenses incurred were rent ₦4500, motor repairs ₦1200 and telephone ₦900.

The basis of cost apportionment is 1/2 stationary 1/3 video.

Find the total expenses allocated to the stationary department?

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Boro Limited apportion 1/6 of its rent for factory and 10% of the balance for warehouse. If rent paid is ₦48 600, how much is paid for warehouse?

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Use the information below to answer questions .

On January 1/2005, a machine was bought for ₦56,000 to last for five years with a residual value of ₦1000.

the rate of the yearly depreciation expense would be?

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When goodwill is not retained in the business, the entries in the new partners' book will be to debit?

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Fatima withdraws goods from the business for personal use. the accounting treatment is to debit?

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Use the information below to answer question

Capital.................................₦60 000

Bank....................................₦12 500

General expenses........................₦5 250

Creditors...............................₦17 000

Stock...................................₦98 500

Fixed assets............................₦42 000

Insurance and rates.....................₦18 800

Purchase................................₦63 850

Determine the total of the trial balance?

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Use the information below to answer question .

Capital.....................N?

Profit and loss.............?3500

Current assets..............N?

Current liabilities.........?2000

Fixed assets................?11000

The company maintains a current ratio of 3:1.

The capital balance is?

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X represents

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Given:

Stock of raw materials 1/40............₦11 150

Purchases of raw materials.............₦112 550

Raw material returned..................₦31 150

Stock of Raw materials 31/12/04........₦27 150

Calculate the cost of raw materials consumed?

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Accrual accounting differs from cash accounting because it recognizes?

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Motor: ₦10 000
Fixtures: ₦5 000
Cash: ₦2 500
Creditors: ₦7 000
Loan: ?

LOAN IS 30% OF CREDITORS.

A company has departments S,T and U. The sales are ₦20 000,20 000, ₦40 000 AND ₦60 000 respectively if the sales commission paid is ₦12 000, how much is T's share?

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The subscriptions received represent 80% of total payments and the opening balance is 30% of gate-fee collections.

The subscriptions received would be

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MPOBA Club's annual donations from members amount to 112% of its internally generated revenue from the following.Sales of drinks...................₦212 500

Annual dues.......................₦112 000How much is the total receipt of the club?

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To determine the bank balance at the end of the month, we need to calculate the total amount of cash and cheques deposited in the bank, and the total amount of cash and cheques that have been issued or withdrawn from the bank. From the given cash book, we can see that: - The opening bank balance was ₦5,000. - There were no bank deposits during the month. - Cheques amounting to ₦800 were issued during the month. - There were no withdrawals from the bank during the month. - The closing bank balance was recorded as ₦6,500. Therefore, the bank balance at the end of the month is ₦6,500. The correct answer to the question is option B: ₦6,500.

After receiving the financial statement the Auditor General of the Federation must submit a report to the National Assembly within?

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Given:

....................January.............December

Assets................₦28,320.............₦25,320

Creditors.............₦5,620..............₦10,320

The proprietor made drawings of ₦755 per month for personal use.

The profit for the period is?

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To find the profit for the period, we need to calculate the difference between the January and December assets, and then adjust for any drawings made by the proprietor during the year. The change in assets over the period is: December assets - January assets = ₦25,320 - ₦28,320 = -₦3,000 A negative change in assets means that assets decreased over the period, which could be due to losses or drawings made by the proprietor. To adjust for the proprietor's drawings, we need to add them back to the decrease in assets: -₦3,000 + (₦755 x 12) = ₦6,060 Now we can calculate the profit for the period by subtracting the increase in liabilities from the adjusted change in assets: ₦6,060 - (₦10,320 - ₦5,620) = ₦1,360 Therefore, the profit for the period is ₦1,360. Answer: ₦1,360