JAMB UTME - Principles of Accounts - 2018
Question 1 Report
The major source of document which enables employer to calculate the employee wages is the?
Question 2 Report
The rent expense for Trendy store is ₦3500. Trendy store has three departments; jewelry, hair dressing, and clothing. The floor spaces occupied by the departments are 3:2:5 respectively. What is the rent allocated to clothing department?
Answer Details
To allocate the rent expense to the clothing department, we need to use the ratio of the floor spaces occupied by each department.
Let's first add up the ratio of the floor spaces:
3 + 2 + 5 = 10
This means that the clothing department occupies 5/10 (or 1/2) of the total floor space.
To allocate the rent expense to the clothing department, we need to multiply the total rent expense by the proportion of the floor space that the clothing department occupies:
₦3500 x 1/2 = ₦1750
Therefore, the rent allocated to the clothing department is ₦1750.
So, the correct answer is option (C) ₦1750.
Question 4 Report
| N | |
| sales | 20,000 |
| cost of sales | 10,000 |
| operating expenses | 2,500 |
| expenses prepaid included in operating expenses | 500 |
Use the information above to answer the following question.
What is the gross profit margin?
Answer Details
The gross profit margin is a measure of the profitability of a business, and it is calculated by dividing the gross profit by the revenue and expressing the result as a percentage. The gross profit is the difference between the revenue and the cost of goods sold, which is the direct cost of producing the goods or services that the business sells.
In the information provided, the revenue or sales is N20,000, and the cost of sales is N10,000. Therefore, the gross profit can be calculated as follows:
Gross profit = Revenue - Cost of sales
= N20,000 - N10,000
= N10,000
The gross profit margin can be calculated by dividing the gross profit by the revenue and expressing the result as a percentage:
Gross profit margin = (Gross profit / Revenue) x 100%
= (N10,000 / N20,000) x 100%
= 50%
Therefore, the gross profit margin is 50%, which means that for every Naira of revenue generated, the business earns 50 kobo in gross profit. This indicates that the business has a healthy gross profit margin and is able to cover its direct costs of production while making a reasonable profit.
Question 5 Report
| N | |
| Purchase ledger opening balance | 4,000 |
| sales ledger opening balance | 6,000 |
| credit purchase | 25,000 |
| Discounts allowed | 1,000 |
| Returns inwards | 2,000 |
| Credit sales during the year | 10,000 |
| Return outwards | 6,000 |
Use the information above to answer the following question;
What is the purchase ledger balance?
Answer Details
Question 6 Report
In order to make the cash book balance equal to the bank statement, it is usually to add?
Answer Details
In order to make the cash book balance equal to the bank statement, it is usually necessary to add the amount of "unpresented cheques". This is because unpresented cheques represent the cheques that have been issued by the organization, but have not yet been presented to the bank for payment. As a result, these cheques are not reflected in the bank statement, but are recorded in the organization's cash book as a deduction from its cash balance.
To reconcile the cash book balance with the bank statement, the organization needs to identify the unpresented cheques and add them to the cash book balance. This adjustment will increase the cash book balance to reflect the total amount of funds the organization actually has, even if they haven't yet been withdrawn from the bank.
The other answer options, such as uncredited cheques, direct payments by bank, and bank charges, would typically require adjustments to be made to the cash book balance, but these adjustments would not necessarily involve adding amounts to the balance. For example, uncredited cheques may need to be deducted from the cash book balance, while bank charges may need to be added as a deduction. Direct payments by bank may also require adjustments to both the cash book and bank statement balances.
Question 7 Report
Which of the following methods of invoicing goods to branches facilitate easy checks on the activities of branches?
Answer Details
Question 9 Report
Use the information below to answer the question
| Liabilities ₦ | Assets ₦ |
| Capital 40,000 | Furnishing 10,000 |
| Ceiling Fan 1,500 | |
| Cash in Hand 28,500 | |
| 40,000 | 40,000 |
If at 31/1/95 the following information was ascertained;
(i) rent for shop ₦12,000 paid for the year
(ii) Total purchases ₦15,000
(iii) Total sales ₦8,200
(iv) Stock of goods left ₦10,000
(v) paid sales boy ₦500
If at 31/1/95 the following information was ascertained;
(i) rent for shop ₦12,000 paid for the year
(ii) Total purchases ₦15,000
(iii) Total sales ₦8,200
(iv) Stock of goods left ₦10,000
(v) paid sales boy ₦500
Question 10 Report
The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as:
Answer Details
The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as a "call in arrears".
When a company issues shares, it may require shareholders to pay for them in installments. These installments are known as "calls" and the amount that is due but not paid on the due date is called a "call in arrears".
For example, let's say a company issues 100 shares with a nominal value of $10 per share. The company may require shareholders to pay for the shares in two installments, with $5 due on the issue of the share and $5 due in six months' time. If a shareholder pays only $4 on the due date of the second installment, they would have a call in arrears of $1.
It is important for companies to keep track of calls in arrears because they represent unpaid capital that the company is entitled to collect. The company can take legal action to recover the amount owed, or it may declare the shares forfeited if the shareholder fails to pay the amount due within a specified period of time.
In summary, a call in arrears is the amount that a shareholder owes to a company for a share that has been issued but not fully paid for on the due date. It represents unpaid capital that the company is entitled to collect, and the company may take legal action or declare the shares forfeited if the shareholder fails to pay the amount due.
Question 11 Report
In the absence of a partnership deed, the act stipulates that____________
Answer Details
Question 12 Report
The fixed amount of money given to a petty cashier at the beginning of a period is called?
Answer Details
The fixed amount of money given to a petty cashier at the beginning of a period is called the "imprest".
An imprest system is a way of managing petty cash, which is a small amount of cash kept on hand for minor expenses such as office supplies, postage, and travel expenses. In this system, a fixed amount of money is provided to the petty cashier at the beginning of a period, and they are responsible for managing and recording all the petty cash transactions during that period.
The purpose of the imprest system is to ensure that the petty cash fund is always at a fixed amount, which is called the "imprest amount". At the end of the period, the petty cashier submits the petty cash vouchers to the main cashier for reimbursement, and the main cashier provides the petty cashier with the exact amount required to bring the petty cash fund back to the imprest amount. This way, the petty cash fund is always replenished to the fixed amount, which helps in keeping track of the petty cash transactions and preventing fraud.
In summary, the imprest is the fixed amount of money provided to a petty cashier at the beginning of a period to manage the petty cash transactions, and it is a part of the imprest system of managing petty cash.
Question 13 Report
The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the________
Answer Details
The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the Auditor General.
The Auditor General is an independent body that audits and reports on the government's financial statements, ensuring that public expenditures are legal and authorized, and are within budgeted amounts. The Auditor General is responsible for reviewing and examining all financial records of the government, ensuring that financial transactions are recorded accurately, and that financial reporting is transparent and in compliance with the applicable laws and regulations.
The Auditor General is usually appointed by the government, and the office is independent of any particular government department. This independence ensures that the Auditor General can operate impartially and without undue influence from any particular government agency. The Auditor General is a vital part of ensuring the accountability and transparency of government finances and plays a critical role in maintaining public trust in government institutions.
Question 14 Report
Which of the following is a conversion cost?
Answer Details
A conversion cost is a manufacturing cost that is incurred in the process of converting raw materials into finished goods. It includes the expenses related to the direct labor and factory overhead used in the production process.
Out of the options given, wages would be considered a conversion cost. Wages refer to the payment made to workers who are directly involved in the manufacturing process. These workers are typically responsible for transforming the raw materials into finished goods, which makes their wages a necessary part of the conversion process.
Factory overhead, which refers to the indirect costs associated with manufacturing, would also be considered a conversion cost. This includes expenses such as rent, utilities, and equipment maintenance, which are necessary to keep the production process running smoothly.
On the other hand, purchases and material costs are not considered conversion costs. Purchases refer to the amount paid for raw materials and other items that are used in the production process, while material costs are the costs associated with the raw materials themselves. While both of these costs are necessary for production to occur, they are not directly related to the conversion process itself.
Question 15 Report
A provision for bad debt account had N33,800 at the beginning of the year and N4,220 at the close of the year. If bad debts are calculated at the rate of 1/20% of annual credit sales, what was the credit sales for the period?
Answer Details
Question 16 Report
The excess of sales over cost of goods sold is?
Answer Details
The excess of sales over cost of goods sold is called "gross profit". Gross profit represents the amount of money that a company earns from selling its products or services, minus the direct costs associated with producing those products or services.
For example, if a company sells a product for $100 and it costs $60 to produce that product, the company's gross profit would be $40. This means that for every product sold, the company earns $40 that can be used to cover other expenses like salaries, rent, and marketing.
It's important to note that gross profit is different from net profit. Net profit is the total amount of money a company earns after all of its expenses, including indirect costs like overhead and taxes, have been subtracted from its revenue. Gross profit, on the other hand, only takes into account the direct costs associated with producing and selling products or services.
Question 17 Report
In dealing with incomplete record, fixed assets are posted to___________-
Answer Details
In dealing with incomplete records, fixed assets are typically posted to the closing balance sheet as a brought forward figure.
This means that the fixed asset is recorded as an asset at the beginning of the accounting period and is carried forward until the end of the period. The asset is then included in the closing balance sheet, which provides a snapshot of the company's financial position at the end of the period.
Since incomplete records do not provide a complete picture of the company's financial transactions, it can be difficult to determine the exact value of fixed assets. Posting fixed assets to the closing balance sheet as a brought forward figure provides a way to include the assets in the company's financial statements without the need for extensive record-keeping or complicated calculations.
By posting fixed assets to the closing balance sheet, it is easier to calculate the net worth of the company, which is an important indicator of financial health. This information can be used by investors, creditors, and other stakeholders to make informed decisions about the company.
Question 18 Report
When goods are sent to branch at cost plus mark up, it means that the branch should sell at_____________
Answer Details
Question 19 Report
In government accounting , the method used which records on the basis of financial entity with self balancing books instead of entity of propietorship is?
Answer Details
The method used in government accounting which records on the basis of financial entity with self-balancing books instead of the entity of proprietorship is called fund accounting.
Fund accounting is a method of accounting used by organizations, such as governments, non-profit organizations, and universities, that have multiple funds with separate accounting and reporting requirements. Each fund is treated as a separate accounting entity, and financial transactions are recorded in separate self-balancing books for each fund.
The purpose of fund accounting is to provide accountability and transparency in the use of public funds. It allows the government to track and report on the use of funds for specific purposes, such as capital projects, debt service, or operating expenses. It also ensures that funds are used only for their intended purposes and that financial reports accurately reflect the financial position of each fund.
In summary, fund accounting is a method of accounting used by government entities that records financial transactions on a fund-by-fund basis with self-balancing books. This provides accountability and transparency in the use of public funds and ensures that funds are used only for their intended purposes.
Question 20 Report
A club received rent N10,000 and donation of N30,000. it paid N6,000 for entertainment and is still owing N16,000 . The balance of the receipts and payments account is?
Answer Details
Question 21 Report
Cost of rent as an expense can be apportioned to all department on the basis of:
Answer Details
The cost of rent can be apportioned to all departments on the basis of the space occupied by each department.
For example, if a company has three departments and Department A occupies 40% of the total office space, Department B occupies 30%, and Department C occupies 30%, then the cost of rent can be apportioned accordingly. If the total cost of rent is $10,000 per month, then Department A would be responsible for $4,000 (i.e., 40% of $10,000), Department B would be responsible for $3,000 (i.e., 30% of $10,000), and Department C would be responsible for $3,000 (i.e., 30% of $10,000).
This method of apportionment is fair because each department is responsible for the amount of space it occupies and therefore the amount of rent it incurs. Using other criteria such as the number of employees, stock value or wages, may not accurately reflect the actual amount of space used by each department and could lead to unfair distribution of rent expenses.
Question 22 Report
The total credit sales for a period can be extracted from the?
Answer Details
The total credit sales for a period can be extracted from the Sales Day Book.
The Sales Day Book is a book of prime entry used to record all credit sales made by a business during a particular period. It typically contains information such as the date of the sale, the name of the customer, the amount of the sale, and any relevant invoice or reference numbers.
Since credit sales involve selling goods or services on credit, they are not immediately paid for at the time of sale. Instead, the customer is given a certain amount of time, usually 30 to 90 days, to pay for the goods or services. As a result, credit sales do not result in an immediate inflow of cash, but they do represent revenue earned by the business.
Therefore, to determine the total credit sales for a given period, we can simply add up all the credit sales recorded in the Sales Day Book for that period. This figure represents the total amount of revenue earned by the business from credit sales during that period, and is an important indicator of the business's financial performance.
In summary, the Sales Day Book is used to record all credit sales made by a business, and the total credit sales for a period can be extracted from this book by adding up all the credit sales recorded during that period.
Question 24 Report
Using the following:
Balance as par overdraft of the cashbook is ₦4000, uncredited cheque is ₦2300, bank charges ₦300, unpresented cheque ₦5000.
What is the adjusted cashbook balance?
Answer Details
Question 25 Report
Use the information below to answer the question:
Trading account for the year ended 31st December 2009
| ₦ | ₦ |
| Opening Stock 32,000 | Sales 48,000 |
| Purchases 40,000 | Less Return 2,000 |
| Carriage inwards 1,000 | |
| 41,000 | |
| Less Return 2,000 39,000 | |
| Cost of goods available ?? | |
| Less closing stock 9,000 | |
| Cost of goods sold ?? |
Calculate the cost of goods sold
Answer Details
To calculate the cost of goods sold, we need to find the cost of goods available and then subtract the closing stock.
The cost of goods available is found by adding the opening stock to the cost of purchases:
32,000 + 39,000 = 71,000
The cost of goods sold is found by subtracting the closing stock from the cost of goods available:
71,000 - 9,000 = 62,000
So, the cost of goods sold is ₦62,000.
Question 26 Report
Advertising expenses incurred on a product in a business organization should be charged to
Answer Details
Advertising expenses incurred on a product in a business organization should be charged to the Sales department.
The purpose of advertising is to promote a product or service to potential customers, which makes it an important part of the sales process. By generating interest in the product, advertising can help to increase sales and revenue.
Therefore, advertising expenses are considered a selling expense and should be charged to the Sales department. This department is responsible for the promotion and sale of the product, and as such, it is appropriate to allocate the cost of advertising to this department.
The Production department is responsible for manufacturing the product, while the Purchase department is responsible for acquiring the materials and supplies needed for production. Neither of these departments is directly involved in the sales process, which means that it would not be appropriate to charge advertising expenses to them.
Finally, the Administration department is responsible for managing the overall operations of the business, including finance, human resources, and legal affairs. While advertising is an important part of running a successful business, it is not typically considered to be an administrative expense.
Question 27 Report
The main objective of accounting report is to provide information about?
Answer Details
Question 28 Report
Profit or loss in a partnership is usually arrived at after deducting from gross profit all expenses including____________
Answer Details
In a partnership, the profit or loss is calculated by subtracting all expenses from the gross profit. These expenses include various costs incurred in running the partnership business, such as rent, utilities, supplies, and wages paid to employees.
Additionally, the expenses also include the salaries paid to partners, which is the amount paid to the partners for their work in the business. This is different from the interest on capital, which is the return on the money invested by the partners in the business.
Interest on loans is the cost of borrowing money to finance the partnership's operations. This interest expense is deducted from the gross profit to determine the partnership's net profit or loss.
Finally, the partners' drawings, which are the amounts taken out of the business by the partners for personal use, are also deducted from the gross profit to determine the partnership's net profit or loss.
In summary, the profit or loss in a partnership is calculated by subtracting all expenses, including salaries paid to partners, interest on capital, interest on loans, and partners' drawings, from the gross profit.
Question 29 Report
A machine bought for N35,000 was estimated to have a life span of 5 years with a scrap value of N9,000.
If the scrap value is presently N15,000, what will be the yearly depreciation using the straight line method?
Answer Details
The straight-line method is a commonly used depreciation method for accounting purposes. It assumes that an asset loses an equal amount of its value each year over its useful life.
To calculate the yearly depreciation using the straight-line method, you need to subtract the scrap value from the original cost and then divide by the useful life of the machine.
Original Cost of the Machine = N35,000
Scrap Value = N15,000
Useful Life = 5 years
Depreciable Cost = Original Cost - Scrap Value
Depreciable Cost = N35,000 - N15,000
Depreciable Cost = N20,000
Yearly Depreciation = Depreciable Cost / Useful Life
Yearly Depreciation = N20,000 / 5
Yearly Depreciation = N4,000
Therefore, the yearly depreciation using the straight-line method for this machine is N4,000. is the correct answer.
Question 30 Report
| N | |
| Direct material | 2,500 |
| Direct labour | 5,000 |
| Direct expenses | 1,000 |
| Overhead expenses | 1,500 |
Use the information contained in the table to answer the question below.
From the data above, compute the prime cost.
Answer Details
To compute the prime cost, we need to add the cost of direct materials, direct labour, and direct expenses.
Adding the figures for direct materials, direct labour, and direct expenses gives us:
2,500 + 5,000 + 1,000 = 8,500.
Therefore, the prime cost of the product is N8,500.
The prime cost represents the total cost of direct materials, direct labour, and direct expenses that are directly attributable to the production of a product or service. This cost is essential to know for any manufacturing or production-oriented business, as it is the basis for determining the total cost of production.
Question 33 Report
When a bill is negotiated to a bank , it is said to be?
Answer Details
When a bill is negotiated to a bank, it is said to be "discounted".
Negotiating a bill means transferring ownership of the bill from the original holder to the bank. In exchange for this transfer, the bank pays the holder an amount that is less than the face value of the bill, usually with a fee for providing this service. This process is known as "discounting the bill" because the holder receives a discounted value for the bill.
So, when a bill is negotiated to a bank, it is said to be "discounted" because the holder receives a discounted value for the bill in exchange for transferring ownership to the bank.
Question 34 Report
The partnership deed normally specifies?
Answer Details
A partnership deed is a legal document that outlines the terms and conditions agreed upon by partners in a partnership. It is designed to provide clarity and prevent disputes between partners.
The partnership deed typically specifies how profits or losses are to be shared between the partners. This includes the percentage of profits or losses that each partner is entitled to receive, and how they are to be distributed.
The deed may also specify the capital that each partner is required to contribute annually, as well as any conditions that must be met in order for additional capital to be contributed.
While the partnership deed may address how salaries are paid to partners, it typically does not specify how salaries are paid to employees. This is because employees are not typically considered partners in a partnership.
Finally, the partnership deed may outline the profit that the partnership aims to earn annually, but this is not always the case. Some partnerships may not have a specific profit goal, while others may have more ambitious targets.
In summary, the partnership deed typically specifies how profits or losses are to be shared and the capital to be contributed annually. It may also include other provisions that are important to the partners, such as how the partnership will be managed and what happens in the event of a partner's death or retirement.
Question 35 Report
Which of the following is a common cause of a discrepancy between head office and branch trial office________
Answer Details
Stock and cash in transit is a common cause of a discrepancy between head office and branch trial office.
This is because stock and cash in transit are two types of assets that are often not recorded accurately in the accounts. Stock can be difficult to value and count accurately, especially if it is in transit between the head office and the branch. Cash in transit refers to cash that is in the process of being transferred between the head office and the branch, and may not be recorded in either account until it has arrived at its destination.
If the stock or cash in transit is not recorded accurately, it can result in a discrepancy between the head office and branch trial balance. For example, if the branch has recorded the stock as received, but the head office has not yet recorded it as sent, the branch will have a higher stock value than the head office. Similarly, if the branch has recorded cash in transit as received, but the head office has not yet recorded it as sent, the branch will have a higher cash balance than the head office.
, which suggests stock and repayment, is incorrect because repayment is not directly related to a discrepancy between head office and branch trial balance.
, which suggests creditors and cash in transit, is also incorrect because creditors are liabilities and not directly related to the assets that are in transit between head office and branch.
, which suggests debtors and cash in transit, is also incorrect because debtors are not assets that are in transit between head office and branch, and therefore not a common cause of discrepancy between head office and branch trial balance.
Question 36 Report
A partnership deed is used to____________
Answer Details
A partnership deed is used to promote mutual understanding. It is a legal document that outlines the rights, responsibilities, and obligations of each partner in a partnership business. By specifying the roles and expectations of each partner, a partnership deed helps to prevent misunderstandings and conflicts that could arise between partners.
The partnership deed typically includes information such as the names of the partners, the nature of the business, the capital contributions of each partner, the profit and loss sharing ratio, the management structure of the partnership, the procedures for adding or removing partners, and the rules for dissolution of the partnership.
By having a clear and well-defined partnership deed, all partners can have a shared understanding of how the business will operate and what is expected of each partner. This can help to establish trust and promote a healthy working relationship between partners, which is crucial for the success of any partnership business.
Question 37 Report
| N | |
| Purchase ledger opening balance | 4,000 |
| sales ledger opening balance | 6,000 |
| credit purchase | 25,000 |
| Discounts allowed | 1,000 |
| Returns inwards | 2,000 |
| Credit sales during the year | 10,000 |
| Return outwards | 6,000 |
Use the information above to answer the following question;
Calculate the sales ledger balance.
Answer Details
Question 38 Report
What is the amount of capital employed?
Question 39 Report
Tanko Ltd had
The company's earnings yield is? |
Answer Details
The earnings yield is a measure of the return on investment for a company's earnings. It is calculated by dividing the earnings per share by the market price per share, and expressing the result as a percentage.
In this case, Tanko Ltd's earnings per share is 47k (0.47 Naira), and its market price per share is NM1.50 (1.50 Naira). So, the earnings yield can be calculated as follows:
Earnings yield = (Earnings per share / Market price per share) x 100%
= (0.47 / 1.50) x 100%
= 31.33%
Therefore, the earnings yield for Tanko Ltd is 31.33%, which means that for every Naira invested in the company's stock, investors can expect a return of 31.33 Naira in earnings.
Question 40 Report
Use the information below to answer the question.
| Total | P | Q | Total | P | Q | ||
| ₦ | ₦ | ₦ | ₦ | ₦ | ₦ | ||
| Stock | 3,000 | 2,000 | 1,000 | Sales | 10,000 | 6,000 | 4,000 |
| Purchase | 4,000 | 2,500 | 1,500 | Closing Stock | 2,000 | 1,500 | 500 |
Goods worth ₦300 was transferred from department Q to P. Similarly, P’s total expenses for the period was ₦200.
Department P’s net profit was
Answer Details
