JAMB UTME - Principles of Accounts - 2018

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

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A partnership deed is used to____________

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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.

Use the information contained in the table to answer the question below.

From the data above, compute the prime cost. 

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

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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.

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

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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.

Use the information below to answer the question:

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

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To determine the total value of the assets after the transactions, we need to add up all the values of the assets and also add the values of the transactions that increased the value of the assets, then we will subtract the values of the transactions that reduced the value of the assets. From the information given in the question, the total value of the assets before the transactions is ₦40,000. Now let's calculate the effect of each transaction: (i) Rent for shop ₦12,000 paid for the year: This is a prepaid expense, so we need to deduct ₦12,000 from the cash in hand and add it to the value of furnishing. Therefore, the value of the assets after this transaction is: Cash in hand = ₦28,500 - ₦12,000 = ₦16,500 Furnishing = ₦10,000 + ₦12,000 = ₦22,000 (ii) Total purchases ₦15,000: This is an increase in the value of the stock of goods left. Therefore, the value of the assets after this transaction is: Stock of goods left = ₦10,000 + ₦15,000 = ₦25,000 (iii) Total sales ₦8,200: This is a decrease in the value of the stock of goods left and an increase in the cash in hand. Therefore, the value of the assets after this transaction is: Stock of goods left = ₦25,000 - ₦8,200 = ₦16,800 Cash in hand = ₦16,500 + ₦8,200 = ₦24,700 (iv) Stock of goods left ₦10,000: This is the value of the stock of goods left after the purchases and sales. Therefore, the value of the assets after this transaction is: Stock of goods left = ₦16,800 - ₦10,000 = ₦6,800 (v) Paid sales boy ₦500: This is a decrease in the cash in hand. Therefore, the value of the assets after this transaction is: Cash in hand = ₦24,700 - ₦500 = ₦24,200 Finally, we add up all the values of the assets to get the total value of the assets after the transactions: Total value of assets = ₦22,000 + ₦1,500 + ₦6,800 + ₦24,200 Total value of assets = ₦54,500 Therefore, the option that represents the total value of the assets after the transactions is ₦41,700.

The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as:

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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.

If the scrap value is presently N15,000, what will be the yearly depreciation using the straight line method?

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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.

Which of the following methods of invoicing goods to branches facilitate easy checks on the activities of branches?

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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?

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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.

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?

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If the purchase price exceeds the net assets of a company, the excess amount is debited to________________

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If the purchase price of a company exceeds the net assets, the excess amount is debited to the "goodwill account." Goodwill represents the value of a company's reputation, brand, customer relationships, and other intangible assets that are not included in the net assets of a company. When one company acquires another company for a price that exceeds the net assets of the acquired company, the difference between the purchase price and the net assets is attributed to the value of goodwill. Therefore, the excess amount is debited to the goodwill account to record the value of the intangible assets acquired in the transaction. This helps the acquiring company to reflect the true value of the acquired company's intangible assets on their balance sheet.

The fixed amount of money given to a petty cashier at the beginning of a period is called?

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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.

The excess of sales over cost of goods sold is?

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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.

which of the following  affects the accuracy and authenticity of trial balance? 

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In departmental accounting, which is not a transfer pricing_________

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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.

The partnership deed normally specifies?

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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.

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

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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.

Ade, Tony, Rose share profit and losses in the ratio of 3 : 2 : 1 respectively. Ade retires and the remaining partners decide to take Ade’s share in the existing ratio. What is the new ratio?

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The basic role of accounting is to?

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

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Which of the following is not a type of branch?

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"Single branch" is not a type of branch. A branch refers to an additional location of a business, separate from its main or headquarters location. A dependent branch is a location that relies on the head office for support and decision making. An independent branch operates separately from the head office, making its own decisions and managing its own resources. A foreign branch is a location established in a foreign country. However, "single branch" is not a type of branch. It simply refers to a situation where a business has only one location or branch.

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The price-earnings (P/E) ratio of the company can be calculated by dividing the market price per share by the earnings per share (EPS). The P/E ratio shows how much investors are willing to pay for each Naira of the company's earnings. In this case, to calculate the P/E ratio for Tanko Ltd: Market price per share / Earnings per share = P/E ratio N1.50 / N0.47 = N3.19 So, the P/E ratio for Tanko Ltd is N3.19. This means that investors are willing to pay N3.19 for every Naira of the company's earnings. In simple terms, the P/E ratio is a measure of how much investors are willing to pay for every Naira of the company's earnings and in this case, the P/E ratio for Tanko Ltd is N3.19.

Use the information above to answer the following question;

Calculate the sales ledger balance.

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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?

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In government accounting , the method used which records on the basis of financial entity with self balancing books instead of entity of propietorship is?

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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.

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

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Calls in advance are treated in the balance sheet as_______

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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.

Use the information above to answer the following question. 

What is the gross profit margin?

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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.

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

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The accounting entries used to record a cheque issued by a business are to credit the Cash Book and debit the Drawer's account. When a business issues a cheque, it reduces the balance of cash held by the business, and this reduction in cash is recorded by debiting the Drawer's account. At the same time, the cheque creates a liability for the business, which is recorded by crediting the Cash Book. In other words, when the cheque is issued, the business is reducing its own cash balance and creating a debt or liability that will be paid in the future. Therefore, the Cash Book is credited to reflect the creation of the liability, while the Drawer's account is debited to show the reduction in the business's cash balance.

Subscription received during the year N30,000. Subscription owed last year  N4,000. subscription received for next year N6,000. 

Use the details above to answer the following question.

What is the subscription to be charged to income and expenditure account?

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The subscription to be charged to the income and expenditure account is N36,000. This is because the subscription received during the year is N30,000, the subscription owed from the previous year is N4,000 and the subscription received for the next year is N6,000. Adding up these three amounts gives us N30,000 + N4,000 + N6,000 = N36,000. So, the total subscription to be charged to the income and expenditure account is N36,000.

Lubricating oil and spare parts of machines are example of?

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

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The main objective of accounting report is to provide information about?

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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?

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The control account is used in facilitating?

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

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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.

The cost price method is applicable when_____

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

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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.