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

No salary for partners acting in the business

No interest to be charged on drawings

Profit and loss are to be shared equally

Accounting standards are issued at the International level by the

International Accounting Standards Board

Nigerian Accounting Standards Board

Standing Interpretations Committee

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

to access the performance of the branches

check the excesses of customers

record charges in shareholdings

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

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

View Answer

Question 2 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

Read lesson note on The Final Accounts Of A Sole Trader/proprietorship (WAEC)

Read lesson note on Partnership Accounts (JAMB)

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

The Final Accounts Of A Sole Trader/proprietorship

Partnership Accounts

Nature And Significance Of Accounting

View Answer

Question 3 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

View Answer

Question 4 Report

The difference between double entry and single entry is

Duble entry is based on the dual concept while single entry is not based on dual concept Correct answer

Double entry is an account while single entry is not an account

Double entry keeps personal account while single does not

Double entry is useful for business enterprise while single entry is not

Answer Details

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

Read lesson note on Principles Of Double Entry (JAMB)

Incomplete Records And Single Entry

Principles Of Double Entry

View Answer

Question 5 Report

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

Increase in assets of motor vehicle account Correct answer

Decrease in assets of motor vehicle account

Increase in assets of bank account

Increase in liabilities of bank account

Answer Details

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.

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

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

Nature And Significance Of Accounting

The Accounting Equation And Double Entry Principle

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Question 6 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

Read lesson note on Departmental Accounts (JAMB)

Departmental Accounts

View Answer

Question 7 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."

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

Read lesson note on Accounts Of Not-for-profit Making Organizations (WAEC)

Single Entry And Incomplete Records

Accounts Of Not-for-profit Making Organizations

View Answer

Question 8 Report

A statement in a double entry system in which are recorded all the transactions of one specific class, which takes place during the period is called

Double entry system

Ledger Correct answer

Cash Book

Petty Cash Book

Answer Details

The statement in a double entry system that records all the transactions of one specific class during a period is called a ledger. A ledger is a book or a collection of accounts in which a business records its financial transactions. It contains all the financial information related to a specific account, such as sales, purchases, expenses, and revenues. In a double entry system, every transaction affects at least two accounts, one being debited and the other credited. These debits and credits are recorded in the ledger in separate columns, which allows for the calculation of the account balance at any given time. For example, a business might have a ledger for its sales transactions, in which all the sales made during a particular period are recorded. Each sale is recorded in the ledger as a debit to the customer's account and a credit to the sales account. At the end of the period, the balance in the sales account represents the total amount of sales made during that period. Overall, the ledger is an important tool in accounting as it provides a detailed record of all financial transactions, allowing businesses to monitor their financial performance and make informed decisions.

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Read lesson note on Principles Of Double Entry (JAMB)

Accounting Concepts

Principles Of Double Entry

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Question 9 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 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.

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

Nature And Significance Of Accounting

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Question 11 Report

Discount received is apportioned to each department on the basis of

Floor area

Turnover

Purchases Correct answer

Horse power

Answer Details

Discount received is usually apportioned to each department on the basis of their purchases. The reason for this is that the discount is typically given by the supplier as a percentage of the total value of goods purchased. Therefore, the more a department purchases from the supplier, the more discount they receive. For example, if a department purchases $10,000 worth of goods and the supplier offers a 5% discount, the department would receive a discount of $500. If another department purchases $5,000 worth of goods from the same supplier, they would only receive a discount of $250. By apportioning the discount on the basis of purchases, each department receives a fair share of the discount based on their contribution to the total purchases from the supplier. This helps to ensure that the discount is allocated in a way that reflects the actual purchasing activity of each department.

Read lesson note on Departmental Accounts (JAMB)

Departmental Accounts

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Question 12 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 13 Report

Show how the following transaction will be recorded applying the double entry principle:

Rent ₦50,000 was paid by Mr. Roi to his landlord on 1st July, 20 × 7 by cheque.

Dr Rent A/c; Dr Bank A/c

Dr Bank A/c; Cr Rent A/c

Dr Rent A/c; Cr Bank A/c Correct answer

Dr Rent A/c; Cr Mr. Roi

Answer Details

The correct entry for the transaction where Mr. Roi pays rent of ₦50,000 to his landlord on July 1st, 20x7 by cheque, using the double entry principle would be: - Dr Rent A/c; Cr Bank A/c The transaction has two effects: it decreases Mr. Roi's cash (Bank A/c) balance by ₦50,000 and increases the landlord's Rent A/c balance by the same amount. Applying the double entry principle, we need to record both of these effects in the accounts. Therefore, we will debit Rent A/c with ₦50,000 as it is an expense and credit Bank A/c with the same amount as it is a decrease in cash. This will ensure that the accounting equation (Assets = Liabilities + Equity) remains balanced. In summary, when Mr. Roi pays rent by cheque, we record a debit of ₦50,000 to Rent A/c and a credit of ₦50,000 to Bank A/c to maintain the balance of the accounting equation.

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

Read lesson note on Principles Of Double Entry (JAMB)

The Accounting Equation And Double Entry Principle

Principles Of Double Entry

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Question 14 Report

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

20%

5% Correct answer

10%

15%

Answer Details

Read lesson note on Partnership Accounts (WAEC)

Partnership Accounts

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Question 15 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%.

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Nature And Significance Of Accounting

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Question 16 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 17 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 cost of goods for department B is

4,120

3400

3000

2800 Correct answer

Answer Details

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.

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

Read lesson note on Stock Valuation (JAMB)

Read lesson note on Cashbook (JAMB)

Single Entry And Incomplete Records

Stock Valuation

Cashbook

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Question 18 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

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

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

The Final Accounts Of A Sole Trader

Nature And Significance Of Accounting

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Question 19 Report

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

₦20,000

₦6,000

₦6,174 Correct answer

₦10,000

Answer Details

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.

Read lesson note on Manufacturing Accounts (WAEC)

Read lesson note on Branch Accounts (JAMB)

Read lesson note on Provisions And Reserves (WAEC)

Manufacturing Accounts

Branch Accounts

Provisions And Reserves

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Question 20 Report

The manufacturing account is prepared to ascertain

cost of goods sold

cost of production
Correct answer

Gross profit

Finished goods

Answer Details

Read lesson note on Manufacturing Accounts (JAMB)

Read lesson note on Departmental And Branch Accounts (WAEC)

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

Manufacturing Accounts

Departmental And Branch Accounts

Nature And Significance Of Accounting

View Answer

Question 21 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

View Answer

Question 22 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.

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 23 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

Read lesson note on Provisions And Reserves (WAEC)

Provisions And Reserves

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Question 24 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 25 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 26 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

Calculate the net profit on percentage of expenses.

60%

25%

13%

65.7% Correct answer

Answer Details

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.

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

The Final Accounts Of A Sole Trader

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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.

Read lesson note on Accounting Concepts (WAEC)

Accounting Concepts

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Question 28 Report

Use the information to answer this question

Payment to creditors ₦12,250

Creditors at start ₦550

Creditors at end ₦830

What is the creditors amount in the balance sheet?

₦550

₦12,250

₦12,530

₦830 Correct answer

Answer Details

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

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

The Final Accounts Of A Sole Trader

Nature And Significance Of Accounting

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Question 29 Report

An ordinary share of ₦100 was issued at ₦80. The share was issued at

premium

par

discount Correct answer

loss

Answer Details

An ordinary share of ₦100 was issued at ₦80, which means it was issued at a discount. A share is said to be issued at a discount when its issue price is lower than its par or face value. In this case, the par value of the share is ₦100, but it was issued at ₦80, which is lower than its face value. Therefore, the difference between the issue price and the par value (₦100 - ₦80 = ₦20) is the discount. On the other hand, if a share is issued at a price higher than its par value, it is said to be issued at a premium. When a share is issued at its face value, it is said to be issued at par. Lastly, a loss is incurred when the selling price of an asset is lower than its purchase price. However, that is not the case in this scenario as there is no information on any selling of the share.

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

The Accounting Equation And Double Entry Principle

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Question 30 Report

Mr Ojo gives you the following information on 31st July 2017

Opening Stock	7,000
Closing Stock	12,000
Purchases	60,000
Expenses	4,500

Uniform margin of $33\frac{1}{3}\%$

You are required to calculate the sales

#55,000

#82,500 Correct answer

#27,500

#50,000

Answer Details

Read lesson note on Stock Valuation (JAMB)

Stock Valuation

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Question 31 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 32 Report

Retained profits is an example of

Revenue reserve Correct answer

Capital reserves

General reserves

Loan capital

Answer Details

Retained profits are an example of revenue reserves. Revenue reserves are profits earned by a company that are not distributed as dividends to its shareholders but are kept in the business as a form of retained earnings. Retained profits are a portion of the company's profits that are not paid out as dividends but are instead reinvested in the company to support its growth, pay off debts or improve its operations. These retained profits can be accumulated over time, allowing a company to build up its reserves and strengthen its financial position. This can be particularly useful during times of economic uncertainty or market downturns, as the company will have more financial flexibility and resources to weather the storm. Therefore, retained profits are a crucial component of a company's overall financial health, and they are an example of revenue reserves.

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Provisions And Reserves

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Question 33 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 34 Report

Use the information to answer this question

Payment to creditors ₦12,250

Creditors at start ₦550

Creditors at end ₦830

What is the amount of purchase

₦11,970

₦11,000

₦1,250 Correct answer

₦12,053

Answer Details

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 35 Report

Given:

Fixed assets

Liabilities

Current assets

₦

55,000

20,000

13,000

What is the capital?

₦88,000

₦48,000 Correct answer

₦62,000

₦55,000

Answer Details

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The Accounting Equation And Double Entry Principle

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Question 36 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

Ojo's share of profit is

2475

1322.5 Correct answer

4950

6000

Answer Details

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Partnership Accounts

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Question 37 Report

The cost of a machine is ₦10,000. The residual value is ₦4,000. It is expected to last for 4 years. Using the straight line method, what is the amount of depreciation charged per annum?

6000

1000

1500 Correct answer

2500

Answer Details

The straight line method of depreciation is a simple way of calculating the amount of depreciation to be charged each year for an asset. To use this method, we subtract the residual value (the value of the asset after it has been fully depreciated) from the original cost of the asset, and then divide this by the number of years the asset is expected to last. So, for the machine in this question: - Original cost: ₦10,000 - Residual value: ₦4,000 - Years expected to last: 4 The amount of depreciation to be charged per year would be: ₦10,000 - ₦4,000 = ₦6,000 ₦6,000 ÷ 4 years = ₦1,500 So, the amount of depreciation charged per annum is ₦1,500.

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Nature And Significance Of Accounting

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Question 38 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.

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Partnership Accounts

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Question 39 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 40 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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