JAMB UTME - Principles of Accounts - 2023

Which of the following is used to service all operations of government?

Detalles de la respuesta

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**.

In manufacturing, depreciation of office machine is charged to

Detalles de la respuesta

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.

Detalles de la respuesta

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.

What is the value of the indirect manufacturing cost?

Detalles de la respuesta

Indirect cost = 880 + 800 + 18000 + 620
= ₦20300

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

Detalles de la respuesta

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.

The balance as per bank statement is

Detalles de la respuesta

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.

Profit expressed in relation to cost of goods sold is

Detalles de la respuesta

Mark up is when profit is expressed as a percentage of cost price i.e cost of goods sold.

Which of the following is prepared to ascertain the trader's capital under incomplete records?

Detalles de la respuesta

The correct answer is the statement of affairs.
The statement of affairs is a financial statement prepared to determine the trader's capital when complete records are not available. It is used in situations where a business does not keep detailed records of its transactions.
Statement of affairs helps determine the value of assets (what the business owns) and liabilities (what the business owes) at a specific point in time. It shows the overall financial position of the business by listing the assets and liabilities side by side.
By comparing the total value of assets with the total value of liabilities, we can calculate the trader's capital, which represents the difference between the two. It provides an estimate of the business owner's investment or equity in the business.
Since incomplete records lack a detailed record of transactions and financial data, the statement of affairs becomes a helpful tool to assess the trader's capital and provide a snapshot of the business's financial health.

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

Detalles de la respuesta

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.

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

Detalles de la respuesta

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

Which fund is used to meet unforeseen or urgent expenditure

Detalles de la respuesta

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.

Detalles de la respuesta

In company accounting, dividend payments are typically effected in the "appropriation" account. The appropriation account is used to record the allocation of profits or income within a company. It is where the company's board of directors decides how to distribute the company's earnings to its shareholders. Dividend payments are a way for a company to distribute its profits to its shareholders. By making dividend payments, the company shares a portion of its earnings with its owners. When a company decides to pay dividends, the amount to be distributed is transferred from the retained earnings account (which is part of the equity section of the balance sheet) to the appropriation account. This transfer signifies that the profits are being allocated for distribution as dividends. By using the appropriation account for dividend payments, the company can clearly track and document the distribution of profits to shareholders. This helps provide transparency and ensure that dividends are properly accounted for in the company's financial records. To summarize, dividend payments in a company are typically recorded in the "appropriation" account, where the allocation of the company's earnings to shareholders is documented.

Accounting entry for dissolution expenses is

Detalles de la respuesta

The correct accounting entry for dissolution expenses is:
Dr: Realization account; Cr: Cash account.
When a partnership is dissolved, there may be expenses incurred during the winding up of the business. These expenses could include legal fees, accounting fees, and other costs related to the dissolution process.
In accounting, we need to record these expenses accurately. The first step is to debit (Dr) the Realization account. The Realization account is used to record all the assets that are sold or converted to cash during the liquidation process. By debiting this account, we reduce the value of the assets being realized.
Next, we credit (Cr) the Cash account. This entry reflects the payment of actual cash for the dissolution expenses. By crediting the Cash account, we increase the amount of cash that is being paid out from the partnership.
Overall, the dissolution expenses are recorded by debiting the Realization account and crediting the Cash account. This ensures that the expenses are properly accounted for and the financial statements accurately reflect the partnership's liquidation process.

Detalles de la respuesta

The amount of sales for the year is calculated using the formula: Opening Debtors + Sales - Cash received from debtors - Closing Debtors + Bad debts written off + Discount allowed - Discount received. Plugging in the given values, we get: 4000 + Sales - 8500 - 1500 + 350 + 500 - 1000 = Sales. Solving for Sales, we get Sales = 6850.

Detalles de la respuesta

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.

Capital for a profit making organization is generated through

Detalles de la respuesta

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.

The purchases ledger control account is also known as

Detalles de la respuesta

The purchases ledger control account is also known as the creditors control account.
Let me explain it simply for you.
In a business, the purchases ledger records all the transactions related to buying goods or services on credit. It keeps track of the amounts owed to suppliers or vendors. Now, the purchases ledger control account is a summary account that helps in monitoring and controlling these transactions.
Think of it as a big picture view. The purchases ledger control account combines all the individual creditor balances from the purchases ledger. It shows the total amount the business owes to its creditors at any given time.
By using the purchases ledger control account, the business can easily track the total purchases made on credit and manage its outstanding payments to suppliers. It provides a summary of the business's total credit purchases and the total amount owed to creditors.
So, in summary, the purchases ledger control account is the same as the creditors control account because it represents a summary of all the amounts owed to suppliers or vendors.

The Accounting term used to describe a partnership firm that stops operation and disposes its assets is

Detalles de la respuesta

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.

Which of these is not method of stock valuation?

Detalles de la respuesta

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

Given:
I. Cash refunds
II. Debit note issued
III. Dishnoured cheque
IV. Purchases

The item on the credit side of purchase ledger control account includes

Detalles de la respuesta

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.

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
Segun's share of profit is

Detalles de la respuesta

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

The following are importance of branch account except

Detalles de la respuesta

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.

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

Detalles de la respuesta

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.

The use of three column cash book is determined by

Detalles de la respuesta

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.

Which of the following is not charged to manufacturing account?

Detalles de la respuesta

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.

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

Detalles de la respuesta

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.

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

Detalles de la respuesta

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.

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

Detalles de la respuesta

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.

The main purpose of transaction file is?

Detalles de la respuesta

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.

Detalles de la respuesta

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.

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

Detalles de la respuesta

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.

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

Detalles de la respuesta

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.

Which of these is not a subsidiary books?

Detalles de la respuesta

The subsidiary book is a book of original entr or prime entry which consists of: purchases day book, sales day book, returns inwards day book, returns outward day book, cash book, journal, petty cash book.

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

Detalles de la respuesta

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.

Calculate the cost of raw materials consumed

Detalles de la respuesta

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

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

Detalles de la respuesta

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.

Determine the net profit

Detalles de la respuesta

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

The following appears in the trading account except

Detalles de la respuesta

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.

The journal has the following headings except

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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.

An advantage of FIFO method of stock valuation is that

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One of the advantages of FIFO method is that the stock received first will be issued out first thereby reducing the problem of deterioration or obsolesence and also items are issued in order of receipt therefore, it is realistic.