JAMB UTME - Principles of Accounts - 2019

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Given:

Ordinary share dividend ₦100,000, General reserve ₦4,100, Net profit b/d ₦27,370, corporation tax ₦2,500, Profit and loss ₦28,200, Interim ordinary dividend ₦4,050, Goodwill 20,50 provide for preference Dividend ₦2100 and Final ordinary Dividend of 5% and also write off Goodwill at ₦1500.

The retained profit in the Appropriation account is

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The difference between double entry and single entry is

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Where there is no agreement made by the partners, the following provisions takes place except

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In a partnership, when no agreement is made by the partners, the default provisions of the Partnership Act of the relevant country take effect. These provisions dictate the terms of the partnership, including how profits and losses are to be shared, how interest is to be charged on capital and drawings, and whether partners are entitled to receive salaries. In this context, the statement "the following provisions take place except" is not clear as it suggests that there are several provisions, and one of them does not take effect. However, the options given do not constitute provisions that are part of the default provisions of the Partnership Act. Therefore, the statement is incomplete, and we cannot provide a definitive answer. However, we can say that the default provisions of the Partnership Act are in place to provide a framework for partnerships where there is no agreement between the partners. These provisions may vary from country to country and may be different depending on the legal jurisdiction. Overall, it is always recommended for partners to have a partnership agreement in place that outlines the terms and conditions of the partnership, as this can help avoid potential conflicts and ensure that all partners are on the same page.

In the absence of partnership agreement, a loan by a partner attracts interest at

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One of the limitations of accounting is that

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Which of the following is not charged to manufacturing account?

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Distribution expenses are not charged to manufacturing account. Manufacturing account is a record of all the costs incurred during the production process of goods. It includes direct expenses such as raw materials, direct labor (factory wages) and direct expenses incurred in the production process. On the other hand, distribution expenses refer to the costs incurred in the distribution of finished goods to the customers, such as transportation, packaging, and marketing expenses. These costs are not considered a part of the production process and hence are not charged to the manufacturing account. Instead, they are recorded in the selling and administrative expenses account.

The importance of bank statement is all except

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The rules of double entry states that

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Double entry accounting is a method of recording financial transactions in which every transaction is recorded in two accounts: one account is debited and another is credited. This means that for every debit entry (money going out of an account), there must be a corresponding credit entry (money coming into an account), and vice versa. The purpose of double entry accounting is to ensure accuracy and provide a clear and complete record of all financial transactions. This helps to prevent errors and fraud, and allows for easy reconciliation and tracking of financial information.

Given:

What is the accumulated fund?

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Use the following Information to answer this question.

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One of these is not a similarity between Joint Venture and Partnership.

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Receipts and Payment Account (Extract)

                               N

Bal b/f                   3650       Insurance   900

Subscription   (99) 7500       Rate          11,700

                   (2000) 1000      Bal c/d        8,050

Fees                      8500

                            20,650                       20,650

The following information were given:

What is the opening cash balance

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The opening cash balance can be found by looking at the Receipts and Payments Account. The "Bal b/f" column represents the balance brought forward from the previous period, which is the opening cash balance. In this case, the opening cash balance is ₦3,650, which is the first entry under "Bal b/f" in the Receipts and Payments Account. Therefore, the correct option is (3) ₦3,650.

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Payment to creditors ₦12,250

Creditors at start ₦550

Creditors at end ₦830

What is the creditors amount in the balance sheet?

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A proprietor withdraws cash from the business for private use, he

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Expenses are to be shared in the ratio of sales.

What was the cost of goods sold?

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What was the gross profit?

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To calculate the gross profit, we need to subtract the cost of goods sold (COGS) from the total revenue (sales). COGS represents the cost of the products that were sold during the period, and it is calculated as: COGS = Opening stock + Purchases - Closing stock In this case, the values are: COGS = ₦20,000 + ₦70,000 - ₦15,000 = ₦75,000 Total revenue (sales) is given as ₦100,000. Therefore, the gross profit can be calculated as: Gross profit = Total revenue - COGS = ₦100,000 - ₦75,000 = ₦25,000 Hence, the answer is option (D) ₦25,000.

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The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30th June, 19x8

Calculate the net profit on percentage of expenses.

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To calculate the net profit as a percentage of expenses, we need to first determine the total expenses of the company for the year. We can do this by adding up all of the overhead expenses: admin expenses + selling expenses + other overhead expenses. Total expenses = ₦16,800 + ₦15,000 + ₦6,200 = ₦38,000 Next, we can calculate the net profit as a percentage of expenses by dividing the net profit by the total expenses and multiplying by 100. Net profit as a percentage of expenses = (Net profit / Total expenses) x 100 = (₦25,000 / ₦38,000) x 100 = 65.79% Therefore, the correct answer is 65.79%, which is option (D). This means that for every ₦1 spent on expenses, the company earned a net profit of approximately ₦0.66. It's important to note that this percentage does not take into account the cost of goods sold, which is a separate expense and is already deducted from the sales figure.

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Expenses are to be shared in the ratio of sales.

The cost of goods for department B is

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The cost of goods for department B is 2800. To find the cost of goods, we need to subtract the total expenses from the total sales. First, we need to calculate the total expenses by determining the expenses to be shared in the ratio of sales, which is 1500 + 2000 + 50100 = 71600. Then, we can find the total sales for department B, which is 3000 + 5000 = 8000. Finally, we can subtract the total expenses from the total sales: 8000 - 71600 = 2800. This is the cost of goods for department B.

The objective of departmentalization is to

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The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30th June, 19x8

What is the Gross Profit on percentage of sale?

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To calculate the Gross Profit on percentage of sale, we need to use the following formula: Gross Profit Percentage = (Gross Profit / Sales) x 100 First, we need to calculate the Gross Profit, which is the difference between the Sales and Cost of Goods Sold: Gross Profit = Sales - Cost of Goods Sold Gross Profit = 233,000 - 170,000 Gross Profit = 63,000 Next, we can calculate the Gross Profit Percentage using the formula above: Gross Profit Percentage = (Gross Profit / Sales) x 100 Gross Profit Percentage = (63,000 / 233,000) x 100 Gross Profit Percentage = 0.2701 x 100 Gross Profit Percentage = 27.01% Therefore, the Gross Profit on percentage of sale is 27.01%, which means that for every ₦1 of sales, Wazobi Ventures earns a Gross Profit of ₦0.27. The closest option to this answer is 27.0%.

A company goods sent to branch at invoiced price is ₦30,870 at cost plus 25%. The mark-up is

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The mark-up in this scenario is ₦6,174. When a company sells goods to its branch, it usually does so at a price that is higher than the cost price, to make a profit. In this case, the invoiced price of the goods sent to the branch is ₦30,870, which includes a markup of 25% on the cost price. To find the cost price, we can use the following formula: Cost price = Invoiced price / (1 + Markup percentage) Plugging in the values, we get: Cost price = ₦30,870 / (1 + 25%) = ₦24,696 Now, to find the markup, we can use the following formula: Markup = Invoiced price - Cost price Plugging in the values, we get: Markup = ₦30,870 - ₦24,696 = ₦6,174 Therefore, the mark-up in this scenario is ₦6,174. This represents the amount that the company has added to the cost price of the goods to arrive at the invoiced price that it charged to its branch.

Every economic unit, regardless of its legal form of existence, is treated as a separate entity from parties having economic interest is

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The entity concept is a fundamental principle of accounting that assumes that every economic unit, regardless of its legal form of existence, is treated as a separate entity from parties having an economic interest. This means that a business is viewed as a distinct entity separate from its owners, shareholders, creditors, or any other parties with an economic interest in the business. Under the entity concept, the financial transactions of the business are recorded separately from those of the owner or other parties. This enables the business to track its financial performance and position accurately, and to prepare financial statements that are useful for decision-making. For example, if a business owner invests $10,000 of personal funds into the business, the entity concept requires that the transaction be recorded as a liability owed to the owner by the business. Similarly, if the business borrows $5,000 from a bank, the loan is recorded as a liability owed to the bank by the business. By treating the business as a separate entity, the entity concept enables stakeholders to evaluate the financial performance of the business without confusion or distortion caused by mixing personal transactions with business transactions.

Use the question to answer this questionThe following information were extracted from the books of Miliki state

Capital expenditure is

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Capital expenditures are expenditures made by a company to acquire or improve long-term assets that are expected to provide benefits over several years. Examples of capital expenditures include the purchase of equipment, machinery, property, or buildings. Based on the information provided in the question, the following expenditures are capital expenditures: - Sinking of boreholes - Purchase of a motor car - Purchase of beds The total amount spent on these items is ₦2,900,000 + ₦920,000 + ₦425,000 = ₦4,245,000. Therefore, capital expenditure in this case is ₦4,245,000. In conclusion, capital expenditures are expenditures made to acquire or improve long-term assets that are expected to provide benefits over several years. Based on the information provided, the capital expenditure in this case is ₦4,245,000.

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In the preparation of a statement of profit, the opening capital is the amount of money a business had at the beginning of a given period, and the closing capital is the amount of money a business has at the end of that same period. If the opening capital is greater than the closing capital, it means that the business has used more money than it has received during the period, leading to a decrease in its overall capital. This decrease in capital is referred to as a "loss." Therefore, if the opening capital is greater than the closing capital, it indicates that the business has suffered a loss during the period.

Goods were purchased for resale on credit costing ₦150,000 on 30th September 20X8 from Tosanwumi International. The entry to record these transaction is debit

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The entry to record the purchase of goods for resale on credit costing ₦150,000 from Tosanwumi International on 30th September 20X8 is: Debit: Purchase Account ₦150,000 Credit: Tosanwumi International Account ₦150,000 This means that the Purchase Account is debited with the value of the goods purchased on credit, while the Tosanwumi International Account is credited for the same amount, representing the amount owed to the supplier. The Purchase Account is a nominal account that is used to record the cost of goods purchased for resale or for use in the business. The Tosanwumi International Account is a personal account, specifically a creditor account, used to record the amount owed to Tosanwumi International for the goods purchased on credit. This entry follows the double-entry bookkeeping system, which requires that every transaction has equal debits and credits. The debit entry represents the increase in expenses, while the credit entry represents the increase in liabilities, specifically accounts payable to the supplier.

From the following, determine the value of closing stock using:

Feb 1 purchased 200 units @ ₦2.00 each

Feb 3 purchased 100 units @ ₦1.00 each

Feb 4 issued 120 units @ ₦5.00 each

Feb 5 purchased 50 units @ ₦3.00 each

Feb 6 issued 100 units @ ₦4.00 each

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Which of the following cannot depreciate?

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Land is the item that cannot depreciate. Depreciation is the reduction in the value of a fixed asset due to wear and tear, obsolescence or other factors. It is a non-cash expense that is charged against the income of a company over the useful life of the asset. However, land is a fixed asset that has an unlimited useful life, and its value does not diminish over time. Therefore, it cannot be depreciated. On the other hand, plant and machinery, motor vans, and premises are all fixed assets that have a limited useful life, and their values decrease over time due to wear and tear, obsolescence or other factors. As a result, they can be depreciated. In summary, land is the item that cannot be depreciated, while plant and machinery, motor vans, and premises are all items that can be depreciated.

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Industry ltd, issued 100,000 shares at ₦1 each out of its Authorized share capital of ₦200,000 at ₦1 each. At the of the first call, all shareholders paid in full, except for two shareholder who owes ₦20,000.

The company's paid-up capital is

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A sent B a cheque for ₦2000 to provide him with friends. They agreed to share profits in ratio 3 : 2 and settlement is by cheque.

The profit and loss in joint venture with B account in the ledger of A.

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To solve this problem, we need to calculate the total profit and then divide it between A and B in the agreed ratio of 3:2. To calculate the total profit, we need to find the difference between the total revenue and the total expenses: Total revenue = Sales + Advert + Wages = ₦3200 + ₦3278 + ₦516 = ₦6994 Total expenses = Purchases = ₦2600 Total profit = Total revenue - Total expenses = ₦6994 - ₦2600 = ₦4394 Now, to divide the profit between A and B in the agreed ratio of 3:2, we need to use the following formula: A's share = (3 / 5) x Total profit B's share = (2 / 5) x Total profit Substituting the values, we get: A's share = (3 / 5) x ₦4394 = ₦2636.40 B's share = (2 / 5) x ₦4394 = ₦1758.60 Therefore, the profit that A will receive is ₦2636.40, and the profit that B will receive is ₦1758.60. Now, let's calculate the settlement amount by adding the profit to the original amount A paid to B: Settlement amount for B = Original amount paid by A + B's share of profit Settlement amount for B = ₦2000 + ₦1758.60 = ₦3758.60 Therefore, the answer is option (C) ₦993.

In a non-profit making organisation, the excess of Assets over liabilities equals

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In a non-profit making organization, the excess of assets over liabilities equals accumulated funds. Accumulated funds, also known as "net assets" or "fund balance", represent the total amount of funds that the organization has accumulated over time from its operations, donations, and other sources, minus any liabilities that it owes. When an organization has more assets than liabilities, it means that it has accumulated more resources than it has used or spent over time, resulting in a positive balance of accumulated funds. This balance can be used by the organization to fund future projects and initiatives or to build up its reserves. It is important to note that in a non-profit organization, accumulated funds are not owned by any individual or group, but rather are dedicated to the organization's mission and objectives. They are held in trust for the benefit of the organization and the people it serves.

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Ojo, Sam and Ade are in partnership sharing profit in the ratio 4 : 3 : 1 respectively.

Extract from their books for the year ended are

Interest on drawings and capital is allowed 5% respectively and profit for the year amounted to ₦4,950

Ojo's share of profit is

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Bought motor vehicle ₦60 paying by cheque. The effect of the transaction will be

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The effect of the transaction will be an increase in the assets of the motor vehicle account and a decrease in the assets of the bank account. When you bought the motor vehicle and paid for it by cheque, you transferred ₦60 from your bank account to the account of the seller. This means that the assets of your bank account decreased by ₦60, while the assets of the motor vehicle account increased by ₦60. In other words, the transaction resulted in the transfer of ₦60 worth of value from your bank account to the motor vehicle account. Therefore, there is no increase in liabilities of the bank account because you did not borrow any money to make the purchase. To summarize, the transaction of buying a motor vehicle and paying for it by cheque resulted in an increase in the assets of the motor vehicle account and a decrease in the assets of the bank account.

The rate of interest on capital for Ade is

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Accounts can be classified into two main categories: personal accounts and impersonal accounts. 1. Personal accounts: These accounts are used to record transactions related to individuals, firms, or companies. Personal accounts can be further classified into two types: - Natural personal accounts: These accounts are related to individuals, such as customers, suppliers, employees, and owners. - Artificial personal accounts: These accounts are related to firms or companies, such as banks, insurance companies, and government organizations. 2. Impersonal accounts: These accounts are used to record transactions that do not involve any individual or firm. Impersonal accounts can be further classified into three types: - Real accounts: These accounts are related to assets, such as property, plant, and equipment, as well as liabilities and capital. - Nominal accounts: These accounts are related to expenses, revenues, gains, and losses. - Representative personal accounts: These accounts are used to record transactions related to a group or category of individuals, such as sales, purchases, and returns. Therefore, the correct option among the given choices is "personal and impersonal account."

Accounting standards are issued at the International level by the

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Accounting standards are issued at the international level by the International Accounting Standards Board (IASB). The IASB is an independent organization that sets accounting standards, known as International Financial Reporting Standards (IFRS), for companies to follow when preparing their financial statements. These standards help ensure that financial information is transparent and comparable across different companies and countries. The IASB operates under the oversight of the IFRS Foundation, which provides funding and governance. The Standards Advisory Council and Standing Interpretations Committee are both bodies that provide advice and guidance to the IASB, but they do not have the authority to issue accounting standards. In summary, the IASB is the organization responsible for setting international accounting standards, which are designed to promote transparency and comparability in financial reporting by companies around the world.

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It has been decided to value goodwill at 2 years purchase of average profit for the past 4 years. The value of goodwill is

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To calculate the value of goodwill, we need to first calculate the average profit for the past 4 years. We can do this by adding up the profits for each year and then dividing by 4: Average profit = (14,000 + 24,000 + 10,000 + 16,000) / 4 = 16,000 Next, we need to calculate 2 years' purchase of the average profit: 2 x 16,000 = 32,000 Therefore, the value of goodwill is ₦32,000. This is because the value of goodwill is determined by the number of years' purchase of the average profit. Among the options given, the correct answer is 32,000.

The two recognised accounting bases are

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The two recognized accounting bases are Accrual and Cash. Accrual accounting recognizes economic events regardless of when payment is received or made. This means that transactions are recorded in the accounts when they occur, regardless of when the cash is received or paid. Cash accounting, on the other hand, only recognizes transactions when cash is received or paid. This means that transactions are only recorded in the accounts when the cash changes hands. In simple terms, accrual accounting provides a more complete picture of a company's financial performance, while cash accounting is more focused on the company's actual cash flow.

Abelawo ltd operates a retail branch at Aba. All purchases are made by the head office in Onitsha and goods are charged to the branch at cost plus 50%. During the year ended. Goods sent to branch at invoiced price is ₦30,870, cash sales ₦13,020 and Bad debt amounted to 129. From the following, what is the profit?

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Discount received is charge to

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Discount received is a reduction in the amount paid for goods or services purchased by a company. This reduction is usually given by a supplier to a customer as an incentive to encourage prompt payment or to build customer loyalty. In accounting, discount received is considered a gain for the company and is therefore credited to the profit and loss account. The profit and loss account is an account that records all revenues and gains on one side, and all expenses and losses on the other side, for a particular period. By recording discount received in the profit and loss account, the company can track and report its total gains for a specific period, and also calculate the net profit or loss for that period. This helps the company to make informed decisions about its operations and financial position, and to meet its reporting requirements. Therefore, the correct answer is option (B) - profit and loss account. Discount received is a gain for the company, and it is credited to the profit and loss account to be recorded as part of the company's total gains and revenues for a specific period.