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

Increase in assets of motor vehicle account

Decrease in assets of motor vehicle account

Increase in assets of bank account

Increase in liabilities of bank account

Majority of commercial transactions are termed credit transactions, which means

Settlement is deferred to a future date

The buyers pay immediately for goods bought

Settlement is deferred to a future date

One of the limitations of accounting is that

transactions are recorded in monetary terms

it ascertain financial position

transactions are recorded in monetary terms

it monitor the progress of the enterprise

JAMB UTME - Principles of Accounts - 2019

Question 1 Report

A machine cost ₦12,500 it will be kept for 4 years and then sold at a scrap value of ₦5,120. Using the diminishing balance method, what is the amount of depreciation for second year?

₦5,120

₦6,400

₦8,000 Correct answer

₦12,500

Answer Details

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Provisions And Reserves

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Question 2 Report

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

AIM is profit making

It is for a specific venture Correct answer

Involves two people

have rights and duties

Answer Details

Read lesson note on Joint Venture Accounts (JAMB)

Joint Venture Accounts

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Question 3 Report

The instrument isued by the Minister who authorized an officer to incure expenditure is a/an

warrant Correct answer

budget

imprest

consolidated fund

Answer Details

The instrument issued by the Minister who authorized an officer to incur expenditure is called a "warrant". A warrant is a legal document that authorizes a government official, usually a financial officer, to spend a specific amount of money from a particular fund or budget. In this context, the Minister issues a warrant to give authority to a specific officer to spend money for a specific purpose. This ensures that government spending is properly authorized and regulated, and helps prevent fraud or misuse of public funds. Therefore, among the options given, the correct answer is "warrant".

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Ethics In Accounting

Partnership Accounts

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Question 4 Report

The purpose of profit and loss account is to ascertain

Gross profit

Capital

Expenses

Net profit Correct answer

Answer Details

The purpose of a profit and loss (P&L) account is to show the financial performance of a business over a specific period of time, usually a month or a year. It helps to determine the net profit or loss of a company by showing the total revenue earned and the total expenses incurred during the period. The P&L account starts with the gross profit, which is calculated by subtracting the cost of goods sold (COGS) from the total revenue. Gross profit shows the amount of money the company made from its sales before any other expenses are taken into account. Next, the P&L account lists all the expenses incurred by the company during the period, such as wages, rent, utilities, advertising, and other operating costs. These expenses are subtracted from the gross profit to arrive at the net profit or net loss. The net profit or loss is the final result of the P&L account and shows whether the company made a profit or suffered a loss during the period. If the net profit is positive, it means the company had more revenue than expenses and made a profit. If the net profit is negative, it means the company had more expenses than revenue and suffered a loss. In conclusion, the purpose of a P&L account is to determine the net profit or loss of a company by showing the total revenue earned, the total expenses incurred, and the difference between the two.

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Miscellaneous Accounts

Nature And Significance Of Accounting

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Question 5 Report

Which of these will not appear in the preparation of control account.

I. Bad debts

II. Discounts

III. Returns

IV. Provision for bad debts

I only

II and III

I and III only

IV only Correct answer

Answer Details

The item that will not appear in the preparation of a control account is option IV only, which is "Provision for bad debts." A control account is a summary account that provides an overview of the individual accounts that make up a particular category, such as debtors or creditors. The purpose of a control account is to reconcile the total balance of individual accounts with the balance in the control account. In the context of accounts receivable, which is money owed to a company by its customers, the control account typically includes transactions such as sales, cash receipts, discounts, and returns. Bad debts, which are accounts that are unlikely to be paid by customers, are also included in the control account. However, the provision for bad debts is a separate account that is used to estimate the amount of bad debts that are likely to occur in the future, and it is not typically included in the control account. In summary, the provision for bad debts is not included in the preparation of a control account, while bad debts, discounts, and returns are typically included.

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Read lesson note on Control Accounts And Self-balancing Ledgers (JAMB)

Partnership Accounts

Control Accounts And Self-balancing Ledgers

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Question 6 Report

Use the following Information to answer this question.

Stock of finished goods: Jan 1st

Dec 31st

Stock of Raw materials: Jan 1st

Dec 31st

Purchase of Raw Materials

Manufacturing Wages

Depreciation: Factory equipment

Direct expenses

Factory Fuel

Carriage inwards on Raw Materials

₦

50,640

71,380

32,160

29,640

145,000

52,000

16,500

12,500

7,000

220,480 Correct answer

213,480

200,480

190,000

Answer Details

Read lesson note on Manufacturing Accounts (JAMB)

Manufacturing Accounts

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Question 7 Report

In the preparation of statement of profit, if the opening capital is greater than closing capital, there will be

profit

capital

loss Correct answer

cash

Answer Details

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.

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 8 Report

Use the following to answer this question.

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 Unissued capital of the company is

₦310,000

₦200,000

₦210,000

₦100,000
Correct answer

Answer Details

The authorized share capital of Industry Ltd is ₦200,000, which means the maximum amount of money the company can raise from issuing shares is ₦200,000. The company issued 100,000 shares at ₦1 each, so it raised ₦100,000. This means that ₦100,000 of the authorized share capital has been issued. All shareholders paid in full except for two shareholders who owe a total of ₦20,000. This means that the company received a total of ₦80,000 in payment for the issued shares. The unissued capital of the company is the portion of the authorized share capital that has not been issued yet. Since the authorized share capital is ₦200,000, and ₦100,000 has been issued, the unissued capital is ₦100,000. Therefore, the answer is (2) ₦200,000 is the authorized share capital, and ₦100,000 is the unissued capital.

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Partnership Accounts

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Question 9 Report

Use the information below to answer this question.

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

Sam's share of profit is

7000

4921

3000

991.8 Correct answer

Answer Details

Read lesson note on Partnership Accounts (JAMB)

Partnership Accounts

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Question 10 Report

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

Sinking of bore holes

Purchase of Motor car

Stationery

Electricity

Purchase of drugs

Purchase of beds

₦

2,900,000

920,000

300,000

45,000

76,000

425,000

Capital expenditure is

₦345,000

₦3,245,000

₦421,000

₦4,245,000 Correct answer

Answer Details

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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Nature And Significance Of Accounting

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Question 11 Report

Capital at start was ₦250,000, while capital at the end of the year was ₦400,000. Drawings during the year amounted to ₦15,000. What is the profit?

₦165,000 Correct answer

₦635,000

₦600,000

₦156,000

Answer Details

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 12 Report

Use the following information to answer this question

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

	₦	₦
Sales Less: cost of goods sold		233,000 170,000
		63,000
less: Overhead Expenses Admin expenses Selling expenses Other overhead expenses	16,800 15,000 6,200
Net profit		25,000

What is the Gross Profit on percentage of sale?

2.7%

0.27%

27.0% Correct answer

29.8%

Answer Details

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%.

Read lesson note on Nature And Significance Of Accounting (JAMB)

Nature And Significance Of Accounting

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Question 13 Report

The importance of bank statement is all except

verifies the accuracy of balances of cash book and cheque book

helps to detect and rectify any error

helps to debit an account Correct answer

helps to update the cash book

Answer Details

Read lesson note on Bank Transactions And Reconciliation Statements (JAMB)

Read lesson note on Cashbook (JAMB)

Bank Transactions And Reconciliation Statements

Cashbook

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Question 14 Report

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.

Sales

Advert

Wages

Purchases

₦

3200

327

1600

₦

2100

463

1100

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

₦1000

₦900

₦993 Correct answer

₦883

Answer Details

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.

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Joint Venture Accounts

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Question 15 Report

One of the objective of maintaining the account of a branch at the head office is to

to access the performance of the branches Correct answer

check the excesses of customers

record charges in shareholdings

record charges in liabilities

Answer Details

One of the objectives of maintaining the account of a branch at the head office is to access the performance of the branches. When a company has several branches, it is essential to keep track of the financial performance of each branch to ensure that they are operating efficiently and generating profits. By maintaining the account of each branch at the head office, the management can easily access the financial records of each branch and compare them to identify the profitable and non-profitable branches. The head office can analyze the financial statements of each branch, including the income statement, balance sheet, and cash flow statement, to determine the financial health of the branch. This information can help the head office make informed decisions, such as allocating resources to profitable branches or taking corrective actions to improve the performance of non-profitable branches. In summary, maintaining the account of a branch at the head office allows the management to access the financial performance of each branch, which is essential for making informed decisions and ensuring the profitability of the entire organization.

Read lesson note on Branch Accounts (JAMB)

Branch Accounts

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Question 16 Report

Use the information to answer this question

Receipts and Payment Account (Extract)

	₦		₦
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:

	1/199	31/12/99
Rates owing	3,600	2000
Insurance prepaid	50	1000
Subscription in arrears	700	600

The figure ₦1000 represent what in the balance sheet.

Assets

Liability Correct answer

capital

Subscription

Answer Details

Read lesson note on Cashbook (JAMB)

Cashbook

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Question 17 Report

Given:

Additional capital

Capital

Closing capital

Net profit

₦

4000

8000

12000

1500

The drawings for the period stand at

1500
Correct answer

3000

12,000

10,500

Answer Details

Read lesson note on Accounting Concepts (WAEC)

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Accounting Concepts

Nature And Significance Of Accounting

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Question 18 Report

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

Sinking of bore holes

Purchase of Motor car

Stationery

Electricity

Purchase of drugs

Purchase of beds

₦

2,900,000

920,000

300,000

45,000

76,000

425,000

Recurrent expenditure is

₦345,000

₦3,245,000

₦421,000 Correct answer

₦4,245,000

Answer Details

Read lesson note on Nature And Significance Of Accounting (JAMB)

Nature And Significance Of Accounting

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Question 19 Report

Use the following to answer this question.

The company's paid-up capital is

₦70,000

₦80,000 Correct answer

₦220,000

₦120,000

Answer Details

Read lesson note on Partnership Accounts (JAMB)

Partnership Accounts

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Question 20 Report

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

No salary for partners acting in the business

There is interest on capital Correct answer

No interest to be charged on drawings

Profit and loss are to be shared equally

Answer Details

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.

Read lesson note on Partnership Accounts (JAMB)

Partnership Accounts

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Question 21 Report

Accounting standards are issued at the International level by the

Standards Advisory Council

International Accounting Standards Board Correct answer

Nigerian Accounting Standards Board

Standing Interpretations Committee

Answer Details

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.

Read lesson note on Nature And Significance Of Accounting (JAMB)

Nature And Significance Of Accounting

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Question 22 Report

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

330

420

230 Correct answer

320

Answer Details

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Stock Valuation

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Question 23 Report

Shares that are offered to existing shareholders at a price is called

par

premium

right issue Correct answer

bonus issue

Answer Details

Shares that are offered to existing shareholders at a discounted price are called a "right issue." This is a type of securities offering that allows existing shareholders the opportunity to purchase additional shares of the company's stock, typically at a price lower than the current market price. The purpose of a right issue is to raise capital for the company and provide existing shareholders with the opportunity to increase their ownership in the company at a favorable price. In a right issue, the company will typically set a record date, which determines which shareholders are eligible to participate in the offering. The shares are then offered to these eligible shareholders in proportion to their existing holdings. The shareholders have the right, but not the obligation, to purchase the additional shares. In conclusion, a right issue is a type of securities offering where existing shareholders are offered the opportunity to purchase additional shares of a company's stock at a discounted price, with the goal of raising capital for the company.

Read lesson note on Partnership Accounts (JAMB)

Partnership Accounts

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Question 24 Report

A rent of ₦50,000 was paid by samson to his landlady by cheque. The double entry in Samson's book is

Debit rent account, Credit bank account

Debit Rent account, Credit Samson's account Correct answer

Debit Bank account, Credit Rent account

Debit Samson's account, Credit Rent account

Answer Details

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Principles Of Double Entry

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Question 25 Report

The advantage of double entry is that

it is easy to prepare the final account Correct answer

it increase assets

has cash and bank column

It disburses cash

Answer Details

The advantage of double-entry bookkeeping is that it ensures the accuracy of financial records and provides a complete picture of a company's financial transactions. Double-entry bookkeeping is a method of recording financial transactions that involves recording every transaction in at least two accounts, with one account debited and the other credited. This ensures that the total debits always equal the total credits, which means that the books are always in balance. By using double-entry bookkeeping, companies can ensure that their financial records are accurate and complete. They can also quickly identify errors and discrepancies in their records, which can help them to make better financial decisions. In addition, double-entry bookkeeping provides a complete picture of a company's financial transactions. It shows how every transaction affects both sides of the accounting equation (i.e., assets = liabilities + equity), which helps companies to understand the impact of their transactions on their financial position. In summary, the advantage of double-entry bookkeeping is that it ensures the accuracy and completeness of financial records, helps companies to quickly identify errors and discrepancies, and provides a complete picture of a company's financial transactions. It is not related to options such as increasing assets or disbursing cash.

Read lesson note on Accounting Concepts (WAEC)

Read lesson note on The Accounting Equation And Double Entry Principle (WAEC)

Read lesson note on Principles Of Double Entry (JAMB)

Accounting Concepts

The Accounting Equation And Double Entry Principle

Principles Of Double Entry

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Question 26 Report

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

Tosanwumi International, credit purchase Account

Purchase Account ₦150,000, credit Tosanwumi International Account ₦150,000 Correct answer

Credit Account ₦150,000, Credit Tosanwumi International ₦150,000

Tosanwumi International ₦150,000, credit credit Account ₦150,000

Answer Details

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.

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Accounting Concepts

The Accounting Equation And Double Entry Principle

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Question 27 Report

Transactions are recorded or posted to the ledger in line with

Accounting Concept

Source document

Double Entry Principle Correct answer

Data collection

Answer Details

Transactions are recorded or posted to the ledger in line with the Double Entry Principle. This principle is the foundation of modern accounting and states that every transaction has two effects: a debit and a credit. Debits and credits must be equal and opposite to keep the accounting equation (assets = liabilities + equity) in balance. So when a transaction occurs, it is analyzed to determine which accounts are affected and how. The debits and credits are then recorded in the ledger, which is a book that contains all the accounts used by a company. Each account has a balance, which reflects the total of all the debits and credits that have been posted to it. For example, let's say a company purchases inventory for $1,000. This transaction affects two accounts: Inventory (an asset) and Accounts Payable (a liability). Using the Double Entry Principle, the company would record a debit of $1,000 to the Inventory account and a credit of $1,000 to the Accounts Payable account. This ensures that the accounting equation stays in balance and that the company's financial statements accurately reflect its financial position. In summary, the Double Entry Principle is the method by which transactions are recorded in the ledger. It ensures that every transaction is properly analyzed and that the resulting debits and credits keep the accounting equation in balance.

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Accounting Concepts

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Question 28 Report

Use the question to answer this question:

Opening stock

₦

Department

100

800

Purchases:

Wages of workers

Salaries

1500

2000

100

Sales

3000

5000

Expenses are to be shared in the ratio of sales.

What was the cost of goods sold?

₦25,000

₦35,000

₦50,000

₦75,000 Correct answer

Answer Details

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The Final Accounts Of A Sole Trader

Nature And Significance Of Accounting

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Question 29 Report

Accounts can be classified into

cash and credit transactions

cash and credit accounts

personal and private account

personal and impersonal account Correct answer

Answer Details

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."

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Single Entry And Incomplete Records

Accounts Of Not-for-profit Making Organizations

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Question 30 Report

Use the following to answer this question

Opening stock

Purchases

Sales

Closing Stocks

₦

20,000

70,000

100,000

15,000

What was the gross profit?

₦35,000

₦75,000

₦50,000

₦25,000 Correct answer

Answer Details

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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Stock Valuation

Nature And Significance Of Accounting

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Question 31 Report

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

credits cash account and debits bank account

credits cash account and debits drawing A/C Correct answer

debits cash account and credits drawings account

debits bank account and credits drawings account

Answer Details

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Read lesson note on Partnership Accounts (JAMB)

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The Final Accounts Of A Sole Trader/proprietorship

Partnership Accounts

Nature And Significance Of Accounting

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Question 32 Report

Use the question to answer this question:

Opening stock

₦

Department

100

800

Purchases:

Wages of workers

Salaries

1500

2000

100

Sales

3000

5000

Expenses are to be shared in the ratio of sales.

The net profit for departmental A is

1880

1600

880

425 Correct answer

Answer Details

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Departmental Accounts

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Question 33 Report

A fall or decrease in the economic service potential of an asset as a result of wear, tear and obsolescence is referred to as

Estimate

Depreciation Correct answer

Asset

Useful Life

Answer Details

Depreciation is the fall or decrease in the economic service potential of an asset as a result of wear, tear and obsolescence. Think of an asset as something you own, like a car, a computer, or a building. Over time, these assets lose value because they get older, wear out, or become outdated. This loss of value is called depreciation. It's an estimate of how much an asset has lost in value over a certain period of time. In simple terms, depreciation is like getting older - the more time goes by, the less useful you become. The same thing happens to assets. The longer they're in use, the less valuable they become, and that decrease in value is called depreciation.

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Nature And Significance Of Accounting

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Question 34 Report

The method of stock valuation in which the issue price is obtained by dividing the value of stock in hand by unit of stock in hand is

FIFO

LIFO

SAP

WAP Correct answer

Answer Details

The method of stock valuation in which the issue price is obtained by dividing the value of stock in hand by unit of stock in hand is called Weighted Average Price (WAP). WAP is a method of determining the average cost of a stock that a company holds in its inventory. It takes into account the cost of each unit of stock and the number of units held. The total cost of the stock is then divided by the total number of units to determine the average cost per unit. This average cost per unit is then used as the value of the stock for accounting purposes. The WAP method is useful for companies that purchase stocks at different times and different prices, as it provides a more accurate reflection of the value of the stock. It is also useful for companies that sell stock frequently, as it provides a more accurate reflection of the cost of the stock and helps to ensure that the company is not overcharging or undercharging for the stock.

Read lesson note on Stock Valuation (JAMB)

Stock Valuation

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Question 35 Report

Which of the following is not charged to manufacturing account?

Direct expenses

Factory wages

Distribution expenses Correct answer

Raw materials

Answer Details

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.

Read lesson note on Manufacturing Accounts (JAMB)

Read lesson note on Cashbook (JAMB)

Manufacturing Accounts

Cashbook

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Question 36 Report

An officer that is charged with the responsibility of carrying out investigations on the book of accounts to show the true and fair view is

Ministry of Finan

Accountant General

Revenue office

Auditor General Correct answer

Answer Details

The officer that is charged with the responsibility of carrying out investigations on the book of accounts to show the true and fair view is the Auditor General. The Auditor General is an independent officer responsible for auditing and reporting on the financial statements of government entities and other organizations to ensure that their financial records are accurate and comply with relevant laws and regulations. Their main task is to review the financial records of an organization and provide an opinion on whether the financial statements represent a true and fair view of the organization's financial position, performance, and cash flows. This helps to enhance transparency, accountability, and good governance in public and private organizations.

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Ethics In Accounting

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Question 37 Report

The similarities between Receipts and payments and income and expenditure account is

Both accounts follows the principle of double entry

They are summaries of financial statements

Both include capital items Correct answer

Both are prepared by non-profit making concern

Answer Details

Read lesson note on Accounts Of Not-for-profit-making Organizations (JAMB)

Read lesson note on Incomplete Records And Single Entry (JAMB)

Accounts Of Not-for-profit-making Organizations

Incomplete Records And Single Entry

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Question 38 Report

Given:

Equipment

Motor Vehicle

Loan

Creditors

Sub in advance

Sub in arrears

₦

10,000

15,000

4,500

3,000

150

3500

What is the accumulated fund?

₦14,150

₦20,850 Correct answer

₦21,850

₦14,200

Answer Details

Read lesson note on Nature And Significance Of Accounting (JAMB)

Read lesson note on Principles Of Double Entry (JAMB)

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 39 Report

In the preparation of account, the owners of the business and the business concerned are treated as:

partners

joint venture

the same person

separate legal entities
Correct answer

Answer Details

In the preparation of accounting records, the owners of the business and the business concerned are treated as separate legal entities. This means that the business is treated as a distinct entity from its owners, and is recognized as having its own financial position, income, and expenses. This is because the business is a separate legal entity, meaning it has its own legal status and is capable of entering into contracts and owning property. For example, if a business takes out a loan, the debt belongs to the business and not to the individual owners. Similarly, if the business makes a profit, the profit belongs to the business and not directly to the owners. Separating the business from its owners in this way allows for a clear and accurate picture of the financial performance of the business, and enables the owners to assess the success of the business as a whole. It also ensures that the business is held responsible for its financial obligations and liabilities, rather than the individual owners.

Read lesson note on Departmental And Branch Accounts (WAEC)

Read lesson note on Partnership Accounts (JAMB)

Departmental And Branch Accounts

Partnership Accounts

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Question 40 Report

Use the information to answer this question

Receipts and Payment Account (Extract)