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Question 1 Report
When goods are purchased on account, the accounting entries are
Answer Details
When goods are purchased on account, it means that the payment for the goods is not made immediately but rather, the supplier or vendor expects payment at a later date. In this case, the accounting entries are: debit purchases account, credit supplier's account The reason for this is that the company has received goods (an asset) and has incurred a liability (the amount owed to the supplier). The purchases account is debited to record the increase in assets, and the supplier's account is credited to record the increase in liabilities. This reflects the fact that the company owes the supplier money for the goods purchased.
Question 2 Report
XYZ Enterprises bought ABC Enterprises by issuing 30,000 ordinary shares of N1 each at a discount of 5%. The assets of ABC Enterprises are stock N18,000. Debtors N11,000. The purchase consideration was
Answer Details
To calculate the purchase consideration, we need to find the total value of the shares issued. Number of shares issued = 30,000 Nominal value of each share = N1 Total nominal value of shares issued = 30,000 x N1 = N30,000 Discount given on shares = 5% of N30,000 = N1,500 Net proceeds from the issue of shares = N30,000 - N1,500 = N28,500 Therefore, the purchase consideration is N28,500.
Question 3 Report
Rent owing as at 31st December 1998, N800. Rent paid up to 31st December 1998, N1,700. Rent owing as at 1st January 1998, N500. Rent charged to the profit and loss account for the year 1998 is
Answer Details
To calculate the rent charged to the profit and loss account for the year 1998, we need to find out the rent expense for the year. Rent expense for the year is the total rent payable for the year minus the rent payable at the beginning of the year (rent owing as at 1st January 1998). Total rent payable for the year is the sum of rent owing as at 31st December 1998 and rent paid up to 31st December 1998. So, Total rent payable for the year = Rent owing as at 31st December 1998 + Rent paid up to 31st December 1998 = N800 + N1,700 = N2,500 Rent expense for the year = Total rent payable for the year - Rent owing as at 1st January 1998 = N2,500 - N500 = N2,000 Therefore, the rent charged to the profit and loss account for the year 1998 is N2,000. Hence, the answer is N2,000.
Question 4 Report
Gross Profit of a business is the
Answer Details
Gross Profit of a business is the excess of sales over the cost of goods sold. In other words, it is the amount of money a company earns from the sales of its products or services after deducting the direct cost of producing those products or services. Direct costs include expenses such as raw materials, labor costs directly involved in production, and any other expenses that are directly associated with producing and selling the product. Gross profit is an important measure of a company's financial performance and is used in calculating other financial ratios such as gross profit margin.
Question 5 Report
A motor vehicle bought for N16,000 was estimated to have a useful life span of 4 years and a scrap of N2,000. What is the net book value of the motor vehicle at the end of the third year, using the straight line method?
Answer Details
The straight-line method is a method of calculating depreciation where the same amount of depreciation is charged each year. To calculate the depreciation for each year, we need to subtract the scrap value from the cost of the asset, then divide the result by the useful life of the asset. In this case, the cost of the motor vehicle is N16,000, and the scrap value is N2,000, so the depreciable cost is N16,000 - N2,000 = N14,000. The useful life of the motor vehicle is 4 years, so the annual depreciation charge is N14,000 / 4 = N3,500. At the end of the third year, the accumulated depreciation will be N3,500 × 3 = N10,500. Therefore, the net book value of the motor vehicle at the end of the third year will be the cost of the asset minus the accumulated depreciation, which is N16,000 - N10,500 = N5,500. So the correct answer is N5,500.
Question 6 Report
A reserve is an amount
Answer Details
A reserve is an amount set aside from profits by a company to be used for a specific purpose. It is not paid to creditors or for paying dividends. Rather, it is kept as a contingency or for future use. Reserves can be used to fund expansions, acquisitions, or other investments, or to cover unexpected expenses. Therefore, the correct option is "set out of profit for future use".
Question 7 Report
use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Opening stock:} & \\ \text{- raw materials} & 6,500 \\ \text{-work-in-progress} & 2,500 \\ \text{Closing Stock:} & \\ \text{- raw materials} & 4,000 \\ \text{-work-in-progress} & 1,000 \\ \text{Purchases of raw materials} & 12,500 \\ \text{Manufacturing wages} & 2,000 \\ \text{Factory rent} & 500\end{array}\)
What is the prime cos?
Answer Details
Question 8 Report
Closing stock was overstated. The effect is that
Answer Details
Closing stock is the value of unsold goods at the end of an accounting period. Overstating closing stock means that its value was recorded more than it actually was, resulting in an increase in the value of the stock. This, in turn, leads to a decrease in the cost of goods sold because the value of goods sold is reduced by the value of closing stock. Therefore, if closing stock is overstated, the cost of goods sold will be understated. As a result, gross profit will be overstated because it is calculated by subtracting the cost of goods sold from the sales revenue. So, the effect of overstating closing stock is that the gross profit is overstated.
Question 9 Report
Which of the following accounts has a debit balance?
Answer Details
An account having a debit balance means that the total amount of all the debits made in the account is greater than the total amount of all the credits made in the account. Out of the options given, the account that has a debit balance is "share discount". "Share discount" is a type of account used to record the difference between the face value of shares and the amount actually received on their issue, when the issue price is less than the face value of the shares. When a company issues shares at a discount, the difference between the issue price and face value is considered as an expense for the company, and is recorded in the share discount account. Since the discount is an expense, it is debited to the share discount account, resulting in a debit balance in the account.
Question 10 Report
Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%. If Williams introduces cash of N10,000 by way of loan to the partnership, how much interest will he earn per annum on the loan?
Answer Details
Question 11 Report
The entries necessary for recording profit loading on goods sent to branch are
Answer Details
Question 12 Report
A motor vehicle bought for N16,000 was estimated to have a useful life span of 4 years and a scrap of N2,000. If the vehicle is sold for N6,000 at the end of third year, what is the profit or loss on sale?
Answer Details
Question 13 Report
In computing, external storage is called
Answer Details
In computing, external storage is referred to as backing storage. It is a type of secondary storage that is used to store data and programs outside of the computer's main memory or internal storage. This can include devices such as hard drives, solid-state drives (SSDs), and USB flash drives. Backing storage is called "external" because it is not part of the computer's internal components and is instead connected to the computer through an external interface such as USB or FireWire. The term "backing" refers to the fact that the storage is used to back up data, and can also be used to store large amounts of data that cannot fit in the computer's main memory.
Question 14 Report
Profit expressed as a fraction of the selling price is known as
Answer Details
The answer is "margin". Margin is a term used in accounting to refer to the profit expressed as a percentage of the selling price. It is the difference between the selling price and the cost price of an item. Margin is often used in pricing decisions and is an important metric for businesses as it helps to determine the profitability of products.
Question 15 Report
Expenses incurred when incorporating a company are
Answer Details
Expenses incurred when incorporating a company are known as preliminary expenses. These expenses are incurred during the process of setting up a company and include legal and professional fees, stamp duty, registration fees, and other costs associated with incorporating a company. Preliminary expenses are typically treated as an intangible asset on the balance sheet and are amortized over a period of time. These expenses are considered to be a cost of doing business and are necessary for the successful formation and operation of a company.
Question 16 Report
Use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Sales} & 14,600 \\ \text{Purchases} & 5,500 \\ \text{Return inward} & 150 \\ \text{Rent} & 2,000 \\ \text{Salaries} & 1,000 \\ \text{Discount received} & 400\\ \text{Closing stock} & 250 \\ \text{Opening stock} & 100\end{array}\)
The cost of goods sold is
Answer Details
To calculate the cost of goods sold, we need to subtract the closing stock from the sum of opening stock, purchases, and any other expenses directly related to the cost of goods sold. The formula for calculating the cost of goods sold is: Cost of goods sold = Opening stock + Purchases - Closing stock Using the values given in the table, we have: Cost of goods sold = 100 + 5,500 - 250 Cost of goods sold = N5,350 Therefore, the answer is N5,350.
Question 17 Report
Which of the following is not an example of input device?
Answer Details
The Central Processing Unit (CPU) is not an input device. The CPU is the primary component of a computer system that performs most of the processing of data and instructions. It receives input from input devices, processes it, and sends output to output devices like visual display unit, printers, etc. Therefore, the correct answer is "Central Processing Unit (CPU)."
Question 18 Report
The document which authorizes the Minister of Finance to release fund for government expenditure is
Answer Details
The document which authorizes the Minister of Finance to release fund for government expenditure is called a "warrant". It is a written authorization that enables the government to access funds for specific purposes. The warrant is issued by the Minister of Finance to the Accountant General who then releases the funds to the respective government agencies. The warrant serves as a legal document that allows the government to spend public funds and is a crucial component of the government's financial management system.
Question 19 Report
Prepaid rent of N650 had been recorded as N560. This is an error of
Question 20 Report
How much did Olu sell goods bought at N1,000 if he sells at a margin of 20% on selling price?
Answer Details
If Olu sells at a margin of 20% on the selling price, then it means the selling price is 120% of the cost price. Let X be the selling price, then: X = 120% of N1,000 X = (120/100) * N1,000 X = N12,000/10 X = N1,200 Therefore, Olu sold the goods at N1,200 if he sells at a margin of 20% on selling price. The answer is N1,200.
Question 21 Report
XYZ Enterprises bought ABC Enterprises by issuing 30,000 ordinary shares of N1 each at a discount of 5%. The assets of ABC Enterprises are stock N18,000. Debtors N11,000. Capital reserve was
Answer Details
Since XYZ Enterprises acquired ABC Enterprises by issuing 30,000 ordinary shares of N1 each at a discount of 5%, we can calculate the total value of the shares issued as follows: 30,000 shares x N1 per share x (1 - 5%) = N28,500 This means that the value of the shares issued is N28,500. We also know the assets of ABC Enterprises are stock N18,000 and debtors N11,000. Therefore, the total value of the assets is: N18,000 + N11,000 = N29,000 Since the value of the assets (N29,000) is greater than the value of the shares issued (N28,500), there is a capital reserve. The amount of the capital reserve is the difference between the value of the assets and the value of the shares issued: N29,000 - N28,500 = N500 Therefore, the capital reserve is N500.
Question 22 Report
A partner who has full power of participating in the conduct of a partnership business is a
Answer Details
A partner who has full power of participating in the conduct of a partnership business is known as a "general partner". A general partner is actively involved in the daily operations of the business and has unlimited liability for the debts and obligations of the partnership. This means that if the partnership is unable to pay its debts, the general partner's personal assets may be used to settle the outstanding obligations. In contrast, a limited partner has limited liability and is not involved in the day-to-day operations of the partnership. A sleeping partner is another name for a silent partner, who provides financial capital but does not participate in the management of the business. A nominal partner is someone who is held out to be a partner, but in reality, does not have any actual involvement in the partnership business.
Question 23 Report
Use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Sales} & 14,600 \\ \text{Purchases} & 5,500 \\ \text{Return inward} & 150 \\ \text{Rent} & 2,000 \\ \text{Salaries} & 1,000 \\ \text{Discount received} & 400\\ \text{Closing stock} & 250 \\ \text{Opening stock} & 100\end{array}\)
Net profit is
Answer Details
To calculate the net profit, we need to subtract all the expenses from the total sales after adjusting for returns and discount received and adding the closing stock. Total sales = 14,600 Less: Returns inward = 150 Net sales = 14,450 Add: Closing stock = 250 Gross profit = 14,700 Now, we need to subtract all the expenses from the gross profit to get the net profit. Gross profit = 14,700 Less: Purchases = 5,500 Add: Opening stock = 100 Net purchases = 5,600 Add: Rent = 2,000 Add: Salaries = 1,000 Total expenses = 8,600 Net profit before discount received = 6,100 Add: Discount received = 400 Net profit = 6,500 Therefore, the net profit is N6,500. Hence, the correct option is (d).
Question 24 Report
The capital of not-for profit making organization is
Answer Details
The capital of a not-for-profit making organization is typically called the "accumulated fund". This fund represents the total of all the organization's net assets over time, and it is used to finance the organization's activities, programs, and services. The accumulated fund is made up of donations, grants, bequests, and other sources of income that have been received by the organization, as well as any surpluses that have been generated by its operations. It is similar to the equity of a for-profit company, but the accumulated fund cannot be distributed to the organization's members or shareholders. Instead, it is used solely to support the organization's mission and objectives.
Question 25 Report
Which of the following is not a petty cash book item? purchase of
Answer Details
Petty cash book is used for recording small cash transactions in a business. Typically, items recorded in the petty cash book include things like stationery, postage stamps, and other small office supplies. However, machinery is not a petty cash book item because it is a large and expensive asset that would be recorded in the fixed asset register or capital expenditure account. Therefore, the correct answer is "machinery".
Question 26 Report
Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%. What is Williams' interest on capital?
Answer Details
Interest on capital is the interest paid by the partnership to the partners on their capital contribution for the year. In this case, the total capital contributed by both Williams and Jacob is N60,000 + N40,000 = N100,000. The interest rate on capital is 10%, which means that the partnership will pay an interest of 10% on the capital contribution of each partner. For Williams, his capital contribution is N60,000. Therefore, his interest on capital for the year will be: N60,000 x 10% = N6,000 Therefore, Williams' interest on capital is N6,000.
Question 27 Report
use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Opening stock:} & \\ \text{- raw materials} & 6,500 \\ \text{-work-in-progress} & 2,500 \\ \text{Closing Stock:} & \\ \text{- raw materials} & 4,000 \\ \text{-work-in-progress} & 1,000 \\ \text{Purchases of raw materials} & 12,500 \\ \text{Manufacturing wages} & 2,000 \\ \text{Factory rent} & 500\end{array}\)
What is the cost of raw materials consumed?
Answer Details
The cost of raw materials consumed can be calculated using the formula: Opening stock of raw materials + Purchases of raw materials - Closing stock of raw materials = Cost of raw materials consumed Substituting the given values, we get: 6,500 + 12,500 - 4,000 = 15,000 Therefore, the cost of raw materials consumed is N15,000. So, the correct option is (C) N15,000.
Question 28 Report
Use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Sales} & 14,600 \\ \text{Purchases} & 5,500 \\ \text{Return inward} & 150 \\ \text{Rent} & 2,000 \\ \text{Salaries} & 1,000 \\ \text{Discount received} & 400\\ \text{Closing stock} & 250 \\ \text{Opening stock} & 100\end{array}\)
Gross profit is
Question 29 Report
In a bonus issue of one new share for every four held, a holder of 100,000 shares will get additional shares of
Answer Details
A bonus issue is an offer made by a company to its shareholders to issue new shares for free, based on the number of shares they currently hold. In this case, the company is offering one new share for every four shares held. Therefore, for every 4 shares held, the shareholder will receive an additional share. If the shareholder currently holds 100,000 shares, we can calculate how many additional shares they will receive by dividing their current shares by 4. 100,000 / 4 = 25,000 Therefore, the shareholder will receive 25,000 additional shares in the bonus issue. The answer is 25,000.
Question 30 Report
use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Opening stock:} & \\ \text{- raw materials} & 6,500 \\ \text{-work-in-progress} & 2,500 \\ \text{Closing Stock:} & \\ \text{- raw materials} & 4,000 \\ \text{-work-in-progress} & 1,000 \\ \text{Purchases of raw materials} & 12,500 \\ \text{Manufacturing wages} & 2,000 \\ \text{Factory rent} & 500\end{array}\)
What is the cost of production?
Answer Details
Question 31 Report
Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%. What is Williams' share of profit?
Answer Details
To determine each partner's share of profit, we need to first calculate the interest on their capital contribution. Williams contributed N60,000, so the interest on his capital is 10% of N60,000, which is N6,000. Jacob contributed N40,000, so the interest on his capital is 10% of N40,000, which is N4,000. The total interest on capital is N6,000 + N4,000 = N10,000. To find Williams' share of the remaining profit, we need to subtract the interest on capital from the total profit: N20,000 - N10,000 = N10,000 Now we can divide the remaining profit equally between Williams and Jacob since there is no partnership agreement. Therefore, Williams' share of profit is N10,000 ÷ 2 = N5,000. So the correct option is: - N5,000
Question 32 Report
a list of all credit and debit balance from the ledger accounts is
Answer Details
A list of all credit and debit balances from the ledger accounts is called a trial balance. It is prepared to verify the accuracy of the recording and balancing of transactions in the ledger accounts. The trial balance lists all accounts and their balances, with the debit balances listed in one column and the credit balances listed in another column. The total of the debit column must equal the total of the credit column to ensure that the accounting equation (assets = liabilities + equity) is in balance. The trial balance is an important step in the accounting cycle and helps to identify errors in the accounting records.
Question 33 Report
In computing, ALU stands
Answer Details
In computing, ALU stands for Arithmetic Logic Unit. An ALU is a digital circuit that performs arithmetic and logic operations on binary inputs. The arithmetic operations include addition, subtraction, multiplication, and division, while the logic operations include AND, OR, NOT, and XOR. The ALU is a crucial component of the central processing unit (CPU) in a computer, as it is responsible for performing the basic arithmetic and logical operations required for processing data.
Question 34 Report
Rent owing as at 31st December 1998, N800. Rent paid up to 31st December 1998, N1,700. Rent owing as at 1st January 1998, N500. The closing balance for 1998 is an item under
Answer Details
The closing balance for 1998 is an item under current liability. This is because rent owing is an amount that the company owes to another party, which must be paid within one year. The closing balance for rent owing represents the total amount that the company owes to its landlord for rent that was due but not yet paid as at the end of the year. This amount is classified as a current liability because it is a debt that must be paid within the next 12 months. Therefore, the closing balance for rent owing is reported under the current liabilities section of the balance sheet.
Question 35 Report
An account is said to have a debit balance because
Question 36 Report
The vote book in Public Sector Accounting is used to
Answer Details
The vote book in Public Sector Accounting is used to control expenditure. The vote book is a record book in which all government expenditure is recorded. It is used to track and control the expenditure of public funds by providing a detailed record of all financial transactions related to government spending. Each government department or agency is allocated a specific budget, and the vote book is used to ensure that the budget is not exceeded. The book helps to promote accountability, transparency and effective financial management in the public sector.
Question 38 Report
Bills receivable is a
Answer Details
Bills receivable is a current asset. Bills receivable are written promises to receive a specified amount of money at a future date from someone who owes the money to the business. These are assets because they represent money owed to the business that is expected to be received in the near future. Current assets are assets that are expected to be converted into cash or used up within one year, and bills receivable usually fall within this category.
Question 39 Report
When a buyer is undercharged, the seller forwards
Answer Details
When a buyer is undercharged, the seller forwards a **debit note**. A debit note is a document used by a seller to inform the buyer of the amount owed as a result of an undercharge or any other type of error that resulted in the seller not receiving the full amount owed. The debit note serves as a request for payment of the additional amount owed. The seller issues the debit note to correct the mistake in the initial invoice and ensure that they receive the correct payment for the goods or services provided.
Question 40 Report
The ratio which measures the solvency of a firm is the
Answer Details
The ratio which measures the solvency of a firm is the quick ratio. The quick ratio is also known as the acid-test ratio. It is used to determine a company's ability to pay off its current liabilities immediately, using only its most liquid assets such as cash, marketable securities and accounts receivable. It excludes inventory because inventory is not easily converted to cash in the short term. A high quick ratio indicates that the company has enough liquid assets to cover its short-term obligations and is therefore considered financially solvent.
Question 42 Report
A motor vehicle bought for N16,000 was estimated to have a useful life span of 4 years and a scrap of N2,000. Using the straight line method, what is the amount of depreciation charged per annum?
Answer Details
The straight-line method is a method of calculating depreciation that involves dividing the cost of an asset minus its scrap value by the number of years of its useful life. In this case, the cost of the motor vehicle is N16,000 and the scrap value is N2,000. So the depreciable cost of the asset is N14,000 (N16,000 - N2,000). Using the straight-line method, the amount of depreciation charged per annum is calculated as depreciable cost divided by the useful life of the asset. Therefore, the amount of depreciation charged per annum is N3,500 (N14,000 divided by 4 years). So the answer is N3,500.
Question 43 Report
Use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Sales} & 14,600 \\ \text{Purchases} & 5,500 \\ \text{Return inward} & 150 \\ \text{Rent} & 2,000 \\ \text{Salaries} & 1,000 \\ \text{Discount received} & 400\\ \text{Closing stock} & 250 \\ \text{Opening stock} & 100\end{array}\)
Net sales is
Question 44 Report
The accounting entry for depreciation at the end of each year is to debit
Answer Details
The accounting entry for depreciation at the end of each year is to debit the provision for depreciation account and credit the machinery account. This is because depreciation is the systematic allocation of the cost of a fixed asset over its useful life, which reduces the carrying amount of the asset. The provision for depreciation account is used to accumulate the total amount of depreciation charged to an asset over its useful life. By debiting the provision for depreciation account, we are increasing the amount of accumulated depreciation, which reflects the total depreciation charged to date. By crediting the machinery account, we are reducing the carrying amount of the asset on the balance sheet, which reflects the fact that the asset has been used up over time.
Question 45 Report
Williams and Jacob are in partnership but there is no partnership agreement. The capital contributed are N60,000 and N40,000 respectively. Profit for the year is N20,000. Interest on capital is 10%. What is Jacob's share of profit?
Answer Details
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