The accounting entries used to record a cheque issued by a business is to?

debit cash book and credit drawer

credit cash book and debit drawer

debit cash book and credit suspense account

credit cash book and debit suspense account

In the absence of a partnership deed, the act stipulates that____________

Interest should not be allowed on partners drawings

An amount should be fixed as salaries for partners

Profits and losses should not be shared equally

Interest on partner’s loan should be 25%

Interest should not be allowed on partners drawings

The control account is used in facilitating?

the various location of errors in the various accounts

the payment of debts and liabilities of the firm

assets distribution with respect to income

Sule and Ahmed are in partnership sharing profit and losses equally. If Khadija is admitted as a new partner to take 1/5 th as her share. What is the new profit or loss sharing?

Sule1/3, Ahmed1/3, Khadija 1/3.

JAMB UTME - Principles of Accounts - 2018

Question 1 Report

The value of the current assets will be?

N10,361

N10,651 Correct answer

N17,396

N17,848

Answer Details

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 2 Report

Branch stock adjustment account is prepared at?

Cost price

new price

invoice price Correct answer

normal price

Answer Details

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Stock Valuation

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Question 3 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?

N29,000

N24,000

N4,000

N23,000 Correct answer

Answer Details

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Cashbook

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Question 4 Report

The major advantages of an imprest system is that it ?

ensures a proper accountability for every expenditure Correct answer

trains the young accountants in the preparation for greater responsibility

relieves the chief cashier of the numerous petty cash payments

serves as an analysis column for every expenses

Answer Details

Read lesson note on Cashbook (JAMB)

Cashbook

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Question 5 Report

The main difference between the ordinary and preference shareholders is that?

the former have voting rights while the latter do not Correct answer

in the case of winding up, the former are paid first before the latter

the latter are not members of the company while the former are

the former receives dividends while the latter do not

Answer Details

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Joint Venture Accounts

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Question 6 Report

The partnership deed normally specifies?

how profits or losses are to be shared Correct answer

the capital to be contributed annually

how salaries are paid to employees

the profit that should be earned annually

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.

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Partnership Accounts

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Question 7 Report

Kakaku limited with three departments has a total of N7,200,000 as net debtors for the year ended 31/12/2106. The company's policy, provides for 15%bad debt annually. Which of the following represents the total balance of debtors before adjustment?

N6,120,000 Correct answer

N6,120,300

N8,820,000

Answer Details

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Departmental Accounts

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Question 8 Report

Cost of rent as an expense can be apportioned to all department on the basis of:

No of employees

stock value

space occupied Correct answer

wages

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.

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Departmental Accounts

Introduction To Company Accounts

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Question 9 Report

A partnership’s internal regulation are set out by________---

A constitution

A law

A deed Correct answer

An article

Answer Details

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Partnership Accounts

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Question 10 Report

In reconciling the branch and head office accounts, remittance in transit in the branch books is treated as a_____________

Debit entry Correct answer

Credit entry

Reversal entry

Answer Details

In reconciling the branch and head office accounts, remittance in transit in the branch books is treated as a debit entry. Remittance in transit refers to funds that have been sent from the branch to the head office, but have not yet been recorded in the head office's books. When reconciling the accounts, this amount is recorded as a debit in the branch's books because the branch has already sent the funds, but they have not yet been received and recorded by the head office. The debit entry in the branch's books serves to reduce the branch's cash balance, while the corresponding credit entry in the head office's books, when it is eventually recorded, will increase the head office's cash balance. This treatment of remittance in transit as a debit entry is a common practice in accounting and helps to ensure that the accounts are reconciled accurately and that the cash balances in both the branch and head office are correctly reflected.

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Branch Accounts

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Question 11 Report

	₦
Stock at branch 1st January at cost	400
Goods sent to branch at cost	8000
Returns to head office	340
Cash sales	9160
Stock at branch 31st December at cost	720

Use the information below to answer the question.

Adex Ltd. Issues stock to its retail branches at cost price. The following particulars relate to Ede branch.

₦1870

₦1530

₦1640

₦1820 Correct answer

Answer Details

To find the cost of goods sold (COGS) for the Ede branch, we need to calculate the cost of goods available for sale and then subtract the ending inventory. The cost of goods available for sale is the sum of the stock at the beginning of the year and the goods sent to the branch during the year: 400 (stock at the beginning of the year) + 8000 (goods sent to the branch) = 8400 To calculate the COGS, we need to subtract the ending inventory from the cost of goods available for sale. The ending inventory is the stock at the end of the year: 8400 - 720 (stock at the end of the year) = 7680 Next, we need to adjust the COGS for any returns to the head office. The returns are given as 340, so we subtract this from the calculated COGS: 7680 - 340 = 7340 Finally, we need to calculate the gross profit by subtracting the COGS from the cash sales: 9160 - 7340 = 1820 Therefore, the answer is ₦1820, which represents the gross profit for the Ede branch.

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Branch Accounts

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Question 12 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?

100%

50% Correct answer

40%

30%

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.

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Nature And Significance Of Accounting

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Question 13 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

₦22,800

₦9,200 Correct answer

₦800

₦21,200

Answer Details

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Nature And Significance Of Accounting

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Question 14 Report

To account for expenses paid by head office on behalf of the branch, the branch should___________

Debit profit and loss account and credit head office account Correct answer

Debit head office account and credit cash

Credit cash and debit profit and loss account

Credit profit and loss account and debit head office account

Answer Details

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Joint Venture Accounts

Branch Accounts

Departmental Accounts

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Question 15 Report

A cash book had a opening balance of N15,200, closing balance of N18,400 and total cash received during the period of N36,000. What was the amount of cash paid out during the same period?

N29,200

N17,800

N32,800 Correct answer

N19,600

Answer Details

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Cashbook

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Question 16 Report

Use the information below to answer 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		??

₦20,500 Correct answer

₦23,000

₦28,000

₦27,000

Answer Details

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Stock Valuation

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Question 17 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?

₦700

₦1050

₦1750 Correct answer

₦3500

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.

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Departmental And Branch Accounts

Departmental Accounts

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Question 18 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.

N6,500

N8,500 Correct answer

N6,000

N7,500

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.

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Control Accounts And Self-Balancing Ledgers

Cashbook

Nature And Significance Of Accounting

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Question 19 Report

The excess of sales over cost of goods sold is?

gross sales

gross profit Correct answer

net profit

net sales

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.

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Accounting Concepts

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Question 20 Report

In departmental accounting, which is not a transfer pricing_________

cost based transfer price

market based transfer pricing

Dual pricing system

peak pricing Correct answer

Answer Details

Peak pricing is not a transfer pricing method in departmental accounting. Transfer pricing is the process of determining the price at which goods or services are exchanged between different departments or divisions within a company. Cost based transfer price is a method where the transfer price is set based on the cost of producing the goods or services being transferred. Market based transfer pricing is a method where the transfer price is set based on the market price for the goods or services being transferred. Dual pricing system is a method where two different transfer prices are set for the same goods or services, depending on the context in which they are being transferred. Peak pricing is a pricing strategy where prices are increased during periods of high demand, such as holidays or special events. It is not a transfer pricing method.

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Departmental And Branch Accounts

Departmental Accounts

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Question 21 Report

For an incomplete record to provide necessary information, it must be converted to?

double entry

single entry Correct answer

complete records

statement of affairs

Answer Details

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Incomplete Records And Single Entry

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Question 22 Report

Which of the following should not be adjusted for in the profit and loss account?

Accruals

inventory

subscription Correct answer

depreciation

Answer Details

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Departmental And Branch Accounts

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 23 Report

Which of the following is not an inventory costing method?

FIFO

LIFO

Average cost method

LILA Correct answer

Answer Details

The inventory costing method that is not a recognized method is "LILA." This is because "LILA" is not a common inventory costing method used in accounting practices, and it is not a recognized acronym or abbreviation for any known costing method. In contrast, FIFO, LIFO, and the average cost method are all well-known and widely used inventory costing methods in accounting. FIFO stands for "First-In, First-Out," and it means that the first items added to inventory are the first ones sold, while the newer items are sold later. LIFO stands for "Last-In, First-Out," and it means that the most recent items added to inventory are the first ones sold, while older items are sold later. The average cost method takes the average cost of all items in inventory and uses that cost to calculate the value of goods sold and the value of ending inventory. In summary, while FIFO, LIFO, and the average cost method are all recognized inventory costing methods, "LILA" is not a commonly used or recognized inventory costing method.

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Stock Valuation

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Question 24 Report

The current growth in the volume of trading and financial dealings in nigerian is helped by?

credit as a factor in business

payments for goods in cash

increased financial activities Correct answer

government intervention

Answer Details

The current growth in the volume of trading and financial dealings in Nigeria is mainly helped by increased financial activities. Over the past few years, there has been a significant increase in the number of financial institutions, such as banks and mobile money operators, offering various financial products and services. This has made it easier for businesses and individuals to access credit, make payments, and conduct other financial transactions. Moreover, the rise of digital technologies has further facilitated financial activities, allowing people to conduct transactions online and in real-time. This has also helped to reduce the cost and time required to conduct financial transactions, making it more convenient for businesses and individuals to engage in trade. While government intervention may have played a role in creating an enabling environment for financial activities, such as through the introduction of policies and regulations, it is ultimately the increased availability and accessibility of financial services that have driven the growth of trading and financial dealings in Nigeria.

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Nature And Significance Of Accounting

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Question 25 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?

N210,000

N844,400 Correct answer

N840,000

N500,000

Answer Details

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Provisions And Reserves

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Question 26 Report

Lubricating oil and spare parts of machines are example of?

indirect expense

direct expense Correct answer

indirect material

direct material

Answer Details

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Miscellaneous Accounts

Accounting Concepts

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Question 27 Report

Tea and Cup are into a partnership business. Interests on drawings made by partners are at 10% per annum. Tea’s capital is ₦70000 and current balance is ₦50000. He withdrew the following amounts during the year : 3000 on 31st January , 2000 on 31st March, 4000 on 1st July, 1500 on the 30th September, 2500 on 1st November. Cup’s capital is ₦100000 and current balance is ₦40000. He made no drawings during the period. what is the closing balance in Tea’s current account

36,925Cr Correct answer

40,000Cr

50,000Dr

36,295Dr

Answer Details

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Partnership Accounts

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Question 28 Report

When goods are sent to branch at cost plus mark up, it means that the branch should sell at_____________

Price above or below the stipulated price Correct answer

Any price but not below the transfer price

Cost price

A price that is equal to the mark up

Answer Details

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Branch Accounts

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Question 29 Report

The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the________

Accountant general

Finance minister

Auditor general Correct answer

Permanent secretory.

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.

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Public Sector Accounting

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Question 30 Report

What act generally includes completing unfinished partnership business, collecting and paying debts, collecting partnership assets to be turned into cash and taking inventory?

Formation

dissolution Correct answer

winding up

termination

Answer Details

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Partnership Accounts

Joint Venture Accounts

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Question 31 Report

In order to make the cash book balance equal to the bank statement, it is usually to add?

uncredited cheques

direct payments by bank

bank charged

unpresented cheques Correct answer

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.

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Cashbook

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Question 32 Report

When goodwill is not retained in the business, the entries in the new partners books will be to debit______________

Goodwill account and credit partners capital account

Cash account and credit goodwill account

Goodwill account and credit cash account

Partners capital account and credit goodwill account Correct answer

Answer Details

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Partnership Accounts

Provisions And Reserves

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Question 33 Report

In the head office ledger, the value of goods sent to the branch are____________

Debited to the branch current account

Debited to the head office current account Correct answer

Credited to the head office current account

Credited to the branch current account

Answer Details

In the head office ledger, the value of goods sent to the branch are debited to the branch current account. When a company sends goods from the head office to the branch, this is known as a branch transfer. The value of these goods should be recorded in the head office ledger as a debit to the branch current account. This is because the head office is effectively lending the goods to the branch, and the branch will need to repay the head office for these goods at a later date. The branch current account is a type of account in the head office ledger that is used to track the transactions between the head office and the branch. All transactions relating to the branch, such as branch transfers, expenses paid by the head office on behalf of the branch, and cash sent to the branch, are recorded in the branch current account. Therefore, when the head office sends goods to the branch, the value of these goods is recorded as a debit to the branch current account in the head office ledger. This means that the branch owes the head office for the goods received, and the head office can use this information to track the balance owed by the branch. In summary, the value of goods sent to the branch from the head office is debited to the branch current account in the head office ledger, as this account is used to track all transactions between the head office and the branch.

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Branch Accounts

Introduction To Company Accounts

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Question 34 Report

Which of the following is a common cause of a discrepancy between head office and branch trial office________

Stock and repayment

Creditors and cash in transit

Stock and cash in transit Correct answer

Debtors and cash in transit

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.

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Departmental And Branch Accounts

Branch Accounts

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Question 35 Report

A partnership deed is used to____________

Promote mutual understanding Correct answer

Enhance mistrust

Encourage discrepancy

Control funds

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.

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Partnership Accounts

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Question 36 Report

Why are adjustments in the profit and loss account necessary?

To cover some expenses of the following year

To show the provisions made during the year

To show the total expenses paid and income received during the year

To ascertain the actual expenses incurred and income earned during the year Correct answer

Answer Details

The profit and loss account is a financial statement that shows a company's revenues, expenses, and profits over a particular period. The purpose of this statement is to give an overview of the company's financial performance during that period. However, it's not always straightforward to determine the exact amount of income and expenses for a particular period, which is why adjustments are necessary. Adjustments are necessary to ascertain the actual expenses incurred and income earned during the year. This involves adjusting the revenue and expenses figures to reflect the actual amounts earned or incurred during the year, including any amounts that have not been received or paid but are still owed or owing. For example, if a company has sold goods to a customer on credit, the revenue from that sale will not be reflected in the profit and loss account until the payment is received. Similarly, if the company has received goods or services from a supplier but has not yet paid for them, the expense will not be reflected in the profit and loss account until the payment is made. Adjustments are also necessary to show the provisions made during the year. Provisions are amounts set aside to cover potential future expenses or losses. For example, a company may set aside a provision for bad debts to cover potential losses from customers who are unlikely to pay. In conclusion, adjustments in the profit and loss account are necessary to provide an accurate representation of the company's financial performance during the period. These adjustments reflect the actual expenses incurred and income earned during the year, as well as any provisions made for potential future expenses or losses.

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Provisions And Reserves

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Question 37 Report

Departmentalization of accounts is useful because it shows the____________

Over all performance of a division Correct answer

Cost per unit of a profit

Price per unit of a product

Over all performance of a firm

Answer Details

Departmentalization of accounts is useful because it shows the overall performance of a division. It allows a company to track the financial performance of individual departments or divisions within the company, providing insight into which areas of the business are performing well and which ones need improvement. By analyzing financial data for each department, managers can make informed decisions about allocating resources and making changes to improve overall company performance. This approach helps to ensure that each department is held accountable for its performance, and that managers have the information they need to make effective decisions about the allocation of resources. Ultimately, this can lead to improved financial performance for the entire company.

Read lesson note on Departmental And Branch Accounts (WAEC)

Read lesson note on Departmental Accounts (JAMB)

Departmental And Branch Accounts

Departmental Accounts

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Question 38 Report

In dealing with incomplete record, fixed assets are posted to___________-

Profit and loss account as brought forward figure

Closing balance sheet as carried forward figure

Closing balance sheet as brought forward figure Correct answer

Profit and loss as carried forward figure

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.

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

Incomplete Records And Single Entry

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Question 39 Report

Calls in advance are treated in the balance sheet as_______

Current asset

Fixed asset

Current liability Correct answer

Fixed liability

Answer Details

Calls in advance are treated in the balance sheet as a current liability. Calls in advance refer to the money paid by shareholders in advance for shares that they have subscribed for, but not yet fully paid for. The company is therefore indebted to the shareholders for this amount until the shares are fully paid for. In the balance sheet, current liabilities are short-term debts or obligations that are due within a year, and calls in advance typically fall under this category. This is because the shareholders have the right to demand a refund of the money they paid in advance if the shares are not allotted to them or if they choose not to take up the shares. Therefore, calls in advance will be listed as a liability in the balance sheet, typically under the "current liabilities" section, until the shares are fully paid for and the liability is discharged.

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 40 Report

The major source of document which enables employer to calculate the employee wages is the?

norminal roll of employees

records of number of hours worked Correct answer

effort of the employee

Record of independence per employee

Answer Details

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

Nature And Significance Of Accounting

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