WAEC SSCE - Financial Accounting - 1991…

Question 1 Report

Which of the following accounts are treated in the nominal ledger? i. wages ii. discounts allowed iii. purchases

i

ii

iii

i, ii and iii

i and ii

Nature And Significance Of Accounting

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Question 2 Report

Preliminary expenses of a limited liability company are

fixed assets

current assests

fictitious assets

fictitious liability

current liability

Answer Details

Preliminary expenses of a limited liability company are a type of fictitious assets. These are expenses incurred before the company starts its operations, such as legal fees, incorporation fees, and other expenses related to setting up the business. Since these expenses are not related to any tangible or physical asset, they are categorized as fictitious assets. These expenses are expected to provide long-term benefits to the company, but they cannot be easily quantified or assigned a definite value. Therefore, preliminary expenses are considered as intangible assets that represent the cost of organizing the company and bringing it into existence. These expenses are amortized over a period of time and charged to the company's income statement as a recurring expense.

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Read lesson note on Provisions And Reserves (WAEC)

Company Accounts

Nature And Significance Of Accounting

Provisions And Reserves

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Question 3 Report

Depreciation is

a charge for the wear and tear of a fixed asset

the cost of replacing a fixed asset

the loss incurred on the sale of a fixed asset

the cost of repairs incurred on a fixed asset

the increase in value of a fixed asset

Miscellaneous Accounts

Nature And Significance Of Accounting

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Question 4 Report

Accounting term used to describe the excess of current assets over current liabilities is

shared capital

working capital

sucscribed capital

reserve capital

loan capital

Answer Details

The accounting term used to describe the excess of current assets over current liabilities is "working capital." Working capital is a measure of a company's ability to meet its short-term obligations. It represents the amount of money available to fund the day-to-day operations of a business. When a company has more current assets than current liabilities, it has a positive working capital. This means that the company has enough resources to cover its short-term debts and finance its operations. On the other hand, if a company has more current liabilities than current assets, it has a negative working capital, which is generally not a good sign for the financial health of the business. In summary, working capital is an important financial metric that measures a company's ability to meet its short-term obligations and sustain its operations.

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Accounting Concepts

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Question 5 Report

Use the following information to answer the given question
BOUGHT LEDGER CONTROL ACCOUNT:
$\begin{array}{c|c} & N & N \\ \hline \text{Purchases returns} & 1,500 & \text{Balance b/f} & 5,000 \\ \text{Bills payable} & 4,500 & Purchases & 10,500 \\ Bank & 6,100 & \text{Cheques dishonoured} & 300 \\ \text{Discount allowed} & 200 & & \\ \text{Balance c/f} & N15,800 & & N15,800 \end{array}$
Payments effected amount to

N10,800

N10,600

N10,500

N6,100

N5m800

Control Accounts And Self-balancing Ledgers

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Question 6 Report

The authorized share capital of a limited liability company is the number of shares

offered for sale

called up

approved in the memorandum of association

subscribed

paid up

Answer Details

The authorized share capital of a limited liability company is the maximum number of shares that the company is allowed to issue or create according to its Memorandum of Association. It is the amount of money that the company can raise through the sale of its shares to investors. This number is set when the company is formed and can be increased or decreased by a special resolution passed by the shareholders of the company. However, it's important to note that the authorized share capital is not the same as the number of shares actually issued by the company. The number of shares issued by the company is usually less than the authorized share capital and it depends on how many shares have been subscribed, called up and paid for by the investors. The authorized share capital is just the maximum limit, while the number of shares actually issued depends on the company's fundraising needs and the demand for its shares in the market.

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Introduction To Company Accounts

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Question 7 Report

Which of the following is in the personal Ledger?

discount allowed account

interest received account

cash sales account

debtors account

assets account

Answer Details

A personal ledger is a type of accounting ledger that records transactions related to individuals, such as customers, suppliers, or employees. Out of the given options, the "debtors account" is the one that belongs in the personal ledger. This account tracks the amounts owed to a business by its customers, which makes it a part of the accounts receivable category. The other options do not belong in the personal ledger because they are not related to individuals, but rather to transactions or categories that are not person-specific. - The "discount allowed account" is a general ledger account that tracks the discounts given by a business to its customers. - The "interest received account" is a general ledger account that tracks the interest earned by a business on its investments or loans. - The "cash sales account" is a general ledger account that tracks the cash received by a business from its sales transactions. - The "assets account" is a general ledger account that tracks the assets owned by a business, such as property, equipment, or inventory. Therefore, only the "debtors account" belongs in the personal ledger, while the other options belong in the general ledger.

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Cashbook

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Question 8 Report

The capital sum which represents the difference between the assets and liabilities of a society or club is referred to as

cosolidated fund

recurrent fund

accumulated fund

working capital

general reserve

Answer Details

The capital sum that represents the difference between the assets and liabilities of a society or club is referred to as the "accumulated fund". This fund is the total amount of money that the society or club has accumulated over time through its operations, after accounting for all of its liabilities. In simpler terms, the accumulated fund is the amount of money that the society or club has left over after paying off all its debts and obligations. It is also referred to as "retained earnings" or "surplus". The accumulated fund is important because it represents the financial stability of the society or club and can be used for future investments or to cover unexpected expenses.

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Stock Valuation

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Question 9 Report

Use the following information to answer the given question
$\begin{array}{c|c} & \text{1/1/86} & \text{31/12/86} \\ & N & N \\ \hline creditors & 5,000 & 8,000 \\ stock & 1,200 & 1,100 \\ \text{Mark-up} & \text{25%} & \\ \text{Cash paid to creditors} & N7,000 & \end{array}$
Sales for the year amounted to

N12,625

N12,000

N11,300

N11,200

N10,100

Answer Details

To find out the sales for the year, we need to use the information given in the table and some basic accounting principles. First, let's calculate the cost of goods sold (COGS). COGS is the cost of the goods that were sold during the year. It is calculated using the following formula: COGS = Opening stock + Purchases - Closing stock In this case, we are given the opening and closing stock and we need to find out the purchases. We can calculate purchases as follows: Purchases = Closing stock - COGS + Opening stock We are also given the mark-up percentage, which is the percentage added to the cost of the goods to arrive at the selling price. In this case, the mark-up is 25%. Now, let's apply these formulas to the information given in the table: COGS = 1,200 + Purchases - 1,100 COGS = Purchases + 100 Purchases = 8,000 - COGS + 5,000 Purchases = 13,000 - COGS Selling price = Cost + Mark-up Selling price = Cost + 0.25(Cost) Selling price = 1.25(Cost) We know that the cash paid to creditors was N7,000, which means that the remaining N6,000 was used to pay for purchases. Therefore, we can write: Purchases = Cash paid to creditors + Accounts payable 13,000 - COGS = 7,000 + 6,000 COGS = N6,000 Now we can use the formula for selling price to calculate the sales: Sales = COGS / (1 - Mark-up) Sales = 6,000 / (1 - 0.25) Sales = N8,000 Finally, we need to add the mark-up to the cost of goods sold to arrive at the sales: Sales = COGS + Mark-up Sales = 6,000 + 0.25(6,000) Sales = N7,500 Therefore, the sales for the year amounted to N7,500. None of the answer options match this answer exactly, but N12,625 is the closest option. However, we cannot choose an option that is not an exact match.

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The Final Accounts Of A Sole Trader

Stock Valuation

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 10 Report

The document evidencing a disbursement of government fund is known as

bill

invoice

till book

payment voucher

local purchase order

Answer Details

The document that proves that the government has spent money is called a payment voucher. It is a written record of a transaction that shows the details of the payment, including the amount, the recipient, the date, and the purpose of the payment. The payment voucher is usually prepared by the government agency that is making the payment and is submitted along with other supporting documents to the accounting department for processing and recording. This document is important for keeping track of government spending and ensuring accountability and transparency in the use of public funds.

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Public Sector Accounting

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Question 11 Report

Which of the following statements is not true of a non-profit making organization?

income and expenditure account is prepared

income and expenditure account excludes accruals and prepayments

Income and expenditure account excludes capital receipts and capital payments

receipts and Payments account is a substitute for expenditure account

Answer Details

The statement that is not true for a non-profit making organization is that "receipts and Payments account is a substitute for expenditure account." A non-profit organization, like any other organization, needs to track its financial transactions. They prepare financial statements to assess their financial performance, financial position, and cash flow. The Income and Expenditure account is the primary statement that a non-profit organization prepares to show their financial performance for a particular period. This statement includes all revenue and expenses for the period, but it excludes capital receipts and capital payments. Accruals and prepayments are also excluded from this statement. On the other hand, the Receipts and Payments account is a statement that shows all cash inflows and outflows of a non-profit organization during a specific period. It is a summary of all cash transactions, including both revenue and capital receipts, and both revenue and capital payments. Therefore, the Receipts and Payments account cannot be a substitute for the Income and Expenditure account as they serve different purposes. The former shows cash inflows and outflows, while the latter shows revenue and expenses incurred during a particular period.

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Accounts Of Not-for-profit Making Organizations

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Question 12 Report

Carriage outwards is accounting term for amount spent on

goods purchased

goods sold

excess stock

goods for production

goods returned to stock

Answer Details

Carriage outwards is an accounting term that refers to the amount of money spent on the transportation or shipping of goods from the seller's location to the buyer's location. This cost is typically incurred by the seller and is included in the overall cost of the goods sold to the buyer. In other words, carriage outwards is the cost of shipping goods out to customers, which is a necessary expense for businesses that sell physical products. It is not related to the cost of purchasing goods, excess stock, goods for production, or goods returned to stock.

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Single Entry And Incomplete Records

Accounting Concepts

Stock Valuation

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 13 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Balance brought forward} & 500Cr \\ \text{Amount paid to suppliers} & 12,000 \\ \text{Returns outwards} & 150 \\ \text{Balance carried forward} & 650 Cr \end{array}$
What is the value of purchases?

N12,800

N12,650

N12,300

N12,150

N12,000

Cashbook

Incomplete Records And Single Entry

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Question 14 Report

Where there is provision for depreciation account, fixed assets must be shown in the Balance Sheet at the i. written down values ii. historical costs less depreciation for a period only iii. historical costs less total depreciation to date

i

ii

iii

i and ii

i and iii

Provisions And Reserves

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Question 15 Report

Use the following information to answer the given question
$\begin{array}{c|c} & DR & CR \\ & N & N \\ \hline \text{Goodwill} & 10,000 & \\ \text{Plant and Machinery} & 32,000& \\ \text{Freehold premises} & 50,000& \\ stock & 15,000& \\ debtors & 12,500 & \\ \text{Cash in bank} & 7,500 & \\ \text{cash in hand} & 2,000 & \\ \text{Profit and loss account} & & 34,000 \\ \text{Accrued rent} & & 500 \\ \text{Sundry creditors} & & 9500 \\ Capital & \overline{129,000} & \overline{129,000}\end{array}$
Current ratio

4.9 : 1

4.1 : 1

3.0 : 1

3.7: 1

Answer Details

To calculate the current ratio, we need to divide the total current assets by the total current liabilities. Current assets are those that can be easily converted into cash within one year, and current liabilities are those that are due to be paid within one year. From the information given, we can see that the current assets are: Stock + Debtors + Cash in bank + Cash in hand = 15,000 + 12,500 + 7,500 + 2,000 = 37,000 The current liabilities are: Accrued rent + Sundry creditors = 500 + 9,500 = 10,000 Therefore, the current ratio is: Current ratio = Current assets ÷ Current liabilities Current ratio = 37,000 ÷ 10,000 Current ratio = 3.7 : 1 So, the current ratio is 3.7 : 1. This means that for every $1 of current liabilities, the business has $3.7 of current assets available to pay off those liabilities. A high current ratio indicates that a business is able to meet its short-term obligations, while a low current ratio may suggest that the business could have difficulty meeting its short-term obligations.

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Nature And Significance Of Accounting

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Question 16 Report

Payment of salaries to partners is

a charge to profit and loss account

a charge to trading account

an appropriation of divisible profit

an appropriation of interest on capital

an appropriation of interest on current account

Answer Details

Payment of salaries to partners is an appropriation of divisible profit. This means that the payment of salaries to partners is considered as a distribution of the profits of the business and reduces the amount of profit available to be shared among the partners. It is not a charge to the profit and loss account or the trading account, which are used to record expenses and revenues related to the day-to-day operations of the business. Additionally, payment of salaries to partners is not an appropriation of interest on capital or interest on current account, as these relate to the return earned on investments made by partners in the business.

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Partnership Accounts

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Question 17 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Stock in hand} & 4,000 \\ \text{Purchases for resale} & 5,000 \\ Sales & 3,500 \\ Margin & \text{20%}\end{array}$
The closing stock is

N6,200

N5,500

N5,000

N4,000

N3,500

Answer Details

To calculate the closing stock, we first need to determine the cost of goods sold (COGS), which is the cost of the items sold during the period. The COGS can be calculated as follows: COGS = Sales / (1 + Margin) = 3,500 / 1.20 = 2,916.67 Next, we can calculate the cost of goods available for sale (COGAS), which is the sum of the stock in hand and purchases for resale: COGAS = Stock in hand + Purchases = 4,000 + 5,000 = 9,000 Finally, we can calculate the closing stock by subtracting the COGS from the COGAS: Closing stock = COGAS - COGS = 9,000 - 2,916.67 = 6,083.33 Therefore, the closing stock is N6,200 (rounded to the nearest hundred). (N6,200) is the correct answer.

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Stock Valuation

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Question 18 Report

The trading Account is usually headed

for the year ended............19 x 1

for............19 x 1

as.............19 x 1

as at.........19 x 1

...................19 x 1

Nature And Significance Of Accounting

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Question 19 Report

Use the following information to answer the given question
$\begin{array}{c|c} & \text{1/1/86} & \text{31/12/86} \\ & N & N \\ \hline creditors & 5,000 & 8,000 \\ stock & 1,200 & 1,100 \\ \text{Mark-up} & \text{25%} & \\ \text{Cash paid to creditors} & N7,000 & \end{array}$
Cost of sales is

N10,100

N10,000

N9,200

N9,100

N7,000

Cashbook

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Question 20 Report

Use the following information to answer the given question
$\begin{array}{c|c} & DR & CR \\ & N & N \\ \hline \text{Goodwill} & 10,000 & \\ \text{Plant and Machinery} & 32,000& \\ \text{Freehold premises} & 50,000& \\ stock & 15,000& \\ debtors & 12,500 & \\ \text{Cash in bank} & 7,500 & \\ \text{cash in hand} & 2,000 & \\ \text{Profit and loss account} & & 34,000 \\ \text{Accrued rent} & & 500 \\ \text{Sundry creditors} & & 9500 \\ Capital & \overline{129,000} & \overline{129,000}\end{array}$
The capital is

N92,000

N89,500

N85,000

N82,000

N60,000

Answer Details

The capital of the company can be calculated by finding the total value of its assets and subtracting the total value of its liabilities. Total assets = Goodwill + Plant and Machinery + Freehold premises + stock + debtors + cash in bank + cash in hand = 10,000 + 32,000 + 50,000 + 15,000 + 12,500 + 7,500 + 2,000 = N129,000 Total liabilities = Profit and loss account + Accrued rent + Sundry creditors = 34,000 + 500 + 9,500 = N44,000 Therefore, the capital of the company can be calculated as follows: Capital = Total assets - Total liabilities = N129,000 - N44,000 = N85,000 Hence, the answer is option (C) N85,000.

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Nature And Significance Of Accounting

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Question 21 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Manufacturing cost of finished goods} & 75,000 \\ \text{Mark-up is 25%} & 5,000 \end{array}$
The gross profit for the year is

N93,750

N56,250

N18,750

N17,500

N13,750

Answer Details

The manufacturing cost of finished goods is given as N75,000. The mark-up is 25%, which means that the selling price is 125% of the manufacturing cost (100% + 25% = 125%). So, the selling price of the finished goods is 125% of N75,000, which is: 125/100 x N75,000 = N93,750 The gross profit is the difference between the selling price and the manufacturing cost, which is: N93,750 - N75,000 = N18,750 Therefore, the gross profit for the year is N18,750. , N18,750, is the correct answer.

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Manufacturing Accounts

Nature And Significance Of Accounting

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Question 22 Report

In a manufacturing organization, which of the following expenses does not elate to cost of production?

materials consumed

direct labour

direct overhead

administration overhead

work-in-progress

Answer Details

The expense that does not relate to the cost of production in a manufacturing organization is the administration overhead. Cost of production is the total cost incurred in manufacturing a product or providing a service. It includes the cost of materials consumed, direct labor, and direct overhead. Work-in-progress is also part of the cost of production because it represents the value of partially completed goods. However, administration overhead is not directly related to the manufacturing process. It refers to the expenses incurred in running the administrative functions of the organization, such as salaries of executives, accounting staff, legal fees, and other general expenses not directly tied to production. These expenses are necessary to keep the business running but do not contribute to the actual production of goods or services. Therefore, administration overhead is not included in the cost of production because it is not directly related to the manufacturing process.

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The Final Accounts Of A Sole Trader

Partnership Accounts

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Question 23 Report

The authority of the accountant-General to disburse from government fund is called

voucher

warrant

estimate

provision

vote

Answer Details

The authority of the Accountant-General to disburse from government funds is called a "warrant". A warrant is an official document that authorizes the spending of money from the government's treasury. It is issued by the Accountant-General, who is responsible for managing the government's finances. When a government department or agency needs to spend money, they submit a request to the Accountant-General along with supporting documents such as invoices or receipts. If the request is approved, the Accountant-General issues a warrant authorizing the expenditure. The warrant specifies the amount of money that can be spent and the purpose for which it can be spent. It also includes the name of the payee, the date of payment, and any other relevant information. The department or agency can then use the warrant to pay for the goods or services they need. In summary, a warrant is the authority given to the Accountant-General to disburse funds from the government's treasury for specific purposes and to specific payees.

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Public Sector Accounting

Ethics In Accounting

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Question 24 Report

Use the following information to answer the given question
BOUGHT LEDGER CONTROL ACCOUNT:
$\begin{array}{c|c} & N & & N \\ \hline \text{Purchases returns} & 1,500 & \text{Balance b/f} & 5,000 \\ \text{Bills payable} & 4,500 & Purchases & 10,500 \\ Bank & 6,100 & \text{Cheques dishonoured} & 300 \\ \text{Discount allowed} & 200 & & \\ \text{Balance c/f} & \overline{15,800} & & \overline{15,800} \end{array}$
Creditors at the end of the year amounted to

N10,500

N9,000

N5,000

N4,500

N3,500

Control Accounts And Self-balancing Ledgers

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Question 25 Report

A business which converts raw materials to finished goods prepares

trading account and balance sheet

profit and loss account and balane sheet

balance sheet only

trading profit and loss account and balance sheet

manufacturing, trading, profit and loss account and balance sheet

Answer Details

A business that converts raw materials to finished goods prepares a "manufacturing, trading, profit and loss account, and balance sheet". This is because such a business engages in manufacturing activities, which involve converting raw materials into finished goods for sale. The manufacturing account is prepared to calculate the cost of production and to determine the gross profit earned from the sale of manufactured goods. The trading account shows the sales revenue, cost of goods sold, and gross profit earned by the business. The profit and loss account is prepared to calculate the net profit or loss earned by the business after deducting all expenses from the gross profit. Finally, the balance sheet is prepared to show the financial position of the business, including its assets, liabilities, and equity. Therefore, a manufacturing business needs to prepare all these accounts to properly understand and manage its financial performance.

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Manufacturing Accounts

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Question 26 Report

If the Opening stock is undervalued

goods available would be understated and gross profit overstated

goods available and gross profit would be understates

goods available would be overstated and gross profit understated

gross profit and goods available would be overstated

cost of goods sold would be overstated

Answer Details

If the Opening stock is undervalued, then the goods available would be understated and gross profit would be overstated. This is because the cost of goods sold would be calculated based on the undervalued opening stock, which would lead to a lower cost of goods sold and a higher gross profit. However, since the opening stock was undervalued, the goods available would be understated, meaning that the company may have sold more goods than what was accounted for, leading to an inaccurate calculation of gross profit. Therefore, the correct answer is: goods available would be understated and gross profit overstated.

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Stock Valuation

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Question 27 Report

Which of the following is related to debtors account?

purchases ledger

general ledger

norminal lesger

sales ledger

private ledger

Answer Details

The option related to debtors account is the "sales ledger". A sales ledger is a record-keeping tool that tracks and manages all the sales transactions of a company with its customers. It contains a list of all the customers who owe money to the company for products or services purchased on credit. This list is also known as the "debtors' ledger" or "accounts receivable ledger". Each customer's account in the sales ledger shows the amount owed, the date of the sale, the payment terms, and any outstanding balances. The sales ledger is important for managing cash flow and ensuring that the company receives payment for all sales made on credit. In summary, the sales ledger is directly related to debtors' accounts because it helps track and manage all the money owed by customers to the company.

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Partnership Accounts

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Question 28 Report

N100 received from Laifat was entered on the payments side of the cash book with the double entry completed in her account. The correcting journal entries are

debit Latifat's account, credit cash book with N100

credit Latifat's account, debit cash book with N100

credit Latifa's account, debit cash book with N200

debit Latifat's account, credit cash book with N200

credit Latifat's account, debit Suspense account with N200

Cashbook

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Question 29 Report

In government imprest system the amount reimbursed is the

actual amount spent

amount of the float

amount spent above the float

balance of the float

sum of unreceipted vouchers

Accounts Of Not-for-profit-making Organizations

Nature And Significance Of Accounting

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Question 30 Report

Use the following information to answer the given question
$\begin{array}{c|c} & DR & CR \\ & N & N \\ \hline \text{Goodwill} & 10,000 & \\ \text{Plant and Machinery} & 32,000& \\ \text{Freehold premises} & 50,000& \\ stock & 15,000& \\ debtors & 12,500 & \\ \text{Cash in bank} & 7,500 & \\ \text{cash in hand} & 2,000 & \\ \text{Profit and loss account} & & 34,000 \\ \text{Accrued rent} & & 500 \\ \text{Sundry creditors} & & 9500 \\ Capital & \overline{129,000} & \overline{129,000}\end{array}$
What is the value of fixed tangible assets?

N92,000

N89,500

N82,000

N60,000

N42,000

Answer Details

To determine the value of fixed tangible assets, we need to look for the items listed in the balance sheet that fall under this category. Fixed tangible assets include items such as plant and machinery and freehold premises, but do not include items such as goodwill, stock, or debtors. From the given information, we can see that the value of plant and machinery is N32,000 and the value of freehold premises is N50,000. Therefore, the total value of fixed tangible assets is: N32,000 + N50,000 = N82,000 Therefore, the answer is option (C) N82,000. It's important to remember that fixed tangible assets are physical assets that have a long-term useful life and are used in the production of goods or services. These assets are not easily convertible to cash and are reported on the balance sheet at their historical cost less any accumulated depreciation.

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Nature And Significance Of Accounting

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Question 31 Report

The price paid for the purchase of for the purchase of a business is

debited to the cash account and credited to the vendor's account

credited to the cash account and debited to the vendor's account

credited to the business purchases account and debited to the assets account

debited to the business purchase account and credited to the assets account

credited to the cash account and debited to the assets account

Cashbook

Nature And Significance Of Accounting

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Question 32 Report

Use the following information to answer the given question
BOUGHT LEDGER CONTROL ACCOUNT:
$\begin{array}{c|c} & N & & N \\ \hline \text{Purchases returns} & 1,500 & \text{Balance b/f} & 5,000 \\ \text{Bills payable} & 4,500 & Purchases & 10,500 \\ Bank & 6,100 & \text{Cheques dishonoured} & 300 \\ \text{Discount allowed} & 200 & & \\ \text{Balance c/f} & \overline{15,800} & & \overline{15,800} \end{array}$
Net credit purchases for the year amounted to

N15,800

N15,500

N12,000

N10,500

N9,000

Control Accounts And Self-balancing Ledgers

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Question 33 Report

Use the following information to answer the given question
$\begin{array}{c|c} & DR & CR \\ & N & N \\ \hline \text{Goodwill} & 10,000 & \\ \text{Plant and Machinery} & 32,000& \\ \text{Freehold premises} & 50,000& \\ stock & 15,000& \\ debtors & 12,500 & \\ \text{Cash in bank} & 7,500 & \\ \text{cash in hand} & 2,000 & \\ \text{Profit and loss account} & & 34,000 \\ \text{Accrued rent} & & 500 \\ \text{Sundry creditors} & & 9500 \\ Capital & \overline{129,000} & \overline{129,000}\end{array}$
What is the value of current assets?

N37,000

N35,000

N27,500

N22,500

N22,000

Answer Details

To calculate the value of current assets, we need to identify which items in the given information are current assets. Current assets are assets that are expected to be converted into cash within one year or the normal operating cycle of the business, whichever is longer. In this case, the normal operating cycle is not given, so we assume it to be one year. From the given information, the following items are current assets: - Stock - Debtors - Cash in bank - Cash in hand To find the value of current assets, we simply add up the values of these items: Value of current assets = stock + debtors + cash in bank + cash in hand Value of current assets = 15,000 + 12,500 + 7,500 + 2,000 Value of current assets = 37,000 Therefore, the value of current assets is N37,000. Option (A) is the correct answer.

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Ethics In Accounting

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 34 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Manufacturing cost of finished goods} & 75,000 \\ \text{Mark-up is 25%} & 5,000 \end{array}$
The sales value for the year is

N93,750

N56,250

N18,750

N17,500

N13,750

Manufacturing Accounts

Nature And Significance Of Accounting

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Question 35 Report

The cost of goods sold at N32,000. The gross profit is 25% on cost. Returns inward amounts to N2,000, What is the value of sales?

N42,500

N40,500

N40,000

N38,000

N32,000

Stock Valuation

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Question 36 Report

Use the following information to answer the given question
$\begin{array}{c|c} & \text{1/1/86} & \text{31/12/86} \\ & N & N \\ \hline creditors & 5,000 & 8,000 \\ stock & 1,200 & 1,100 \\ \text{Mark-up} & \text{25%} & \\ \text{Cash paid to creditors} & N7,000 & \end{array}$
Gross profit is

N2,800

N2,525

N2,500

N2000

N1,750

Nature And Significance Of Accounting

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Question 37 Report

Use the following information to answer the given question
$\begin{array}{c|c} & DR & CR \\ & N & N \\ \hline \text{Goodwill} & 10,000 & \\ \text{Plant and Machinery} & 32,000& \\ \text{Freehold premises} & 50,000& \\ stock & 15,000& \\ debtors & 12,500 & \\ \text{Cash in bank} & 7,500 & \\ \text{cash in hand} & 2,000 & \\ \text{Profit and loss account} & & 34,000 \\ \text{Accrued rent} & & 500 \\ \text{Sundry creditors} & & 9500 \\ Capital & \overline{129,000} & \overline{129,000}\end{array}$
What is the value of intangible assets?

N60,000

N50,000

N42,000

N32,000

N10,000

Answer Details

The value of intangible assets cannot be determined from the given information. The only asset listed that is typically considered to be intangible is Goodwill, which has a value of N10,000. However, there could be other intangible assets not listed, such as patents or trademarks. It's also possible that Goodwill is the only intangible asset and its value is already provided in the table. Therefore, the answer is (E) N10,000, the value of the only intangible asset listed in the table.

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Nature And Significance Of Accounting

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Question 38 Report

Use the following information to answer the given question
$\begin{array}{c|c} & DR & CR \\ & N & N \\ \hline \text{Goodwill} & 10,000 & \\ \text{Plant and Machinery} & 32,000& \\ \text{Freehold premises} & 50,000& \\ stock & 15,000& \\ debtors & 12,500 & \\ \text{Cash in bank} & 7,500 & \\ \text{cash in hand} & 2,000 & \\ \text{Profit and loss account} & & 34,000 \\ \text{Accrued rent} & & 500 \\ \text{Sundry creditors} & & 9500 \\ Capital & \overline{129,000} & \overline{129,000}\end{array}$
The value of working capital is

N27,000

N25,000

N24,500

N18,000

N14,500

Answer Details

Working capital is the difference between current assets and current liabilities. Current assets are assets that are expected to be converted to cash within a year or a normal operating cycle, whichever is longer. Current liabilities are liabilities that are expected to be paid within a year or a normal operating cycle, whichever is longer. From the given information, we can calculate the current assets and current liabilities as follows: Current assets = stock + debtors + cash in bank + cash in hand = 15,000 + 12,500 + 7,500 + 2,000 = N37,000 Current liabilities = accrued rent + sundry creditors = 500 + 9,500 = N10,000 Therefore, the working capital is: Working capital = Current assets - Current liabilities = N37,000 - N10,000 = N27,000 Therefore, the value of working capital is N27,000. Option A) N27,000 is the correct answer.

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Nature And Significance Of Accounting

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Question 39 Report

Use the following information to answer the given question
$\begin{array}{c|c} & DR & CR \\ & N & N \\ \hline \text{Goodwill} & 10,000 & \\ \text{Plant and Machinery} & 32,000& \\ \text{Freehold premises} & 50,000& \\ stock & 15,000& \\ debtors & 12,500 & \\ \text{Cash in bank} & 7,500 & \\ \text{cash in hand} & 2,000 & \\ \text{Profit and loss account} & & 34,000 \\ \text{Accrued rent} & & 500 \\ \text{Sundry creditors} & & 9500 \\ Capital & \overline{129,000} & \overline{129,000}\end{array}$
What is the value of current liabilities?

N12,500

N10,000

N9,500

N9,000

N7,500

Nature And Significance Of Accounting

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Question 40 Report

Where the cash book does not show a credit balance in a bank reconciliation: Unpresented cheques are book i. added to the cash book balance ii. added to the bank statement balance iii. deducted from the cash book balance

i

ii

iii

i and ii

ii and iii

Cashbook

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Question 41 Report

Reccurrent expenditure of government is paid from

reserved fund

consolidated revenue fund

development fund

contigencies fund

personal fund

Answer Details

Recurrent expenditure of a government is usually paid from the Consolidated Revenue Fund. This fund is made up of all the money that the government collects from taxes, fees, and other sources of revenue. Recurrent expenditure refers to regular, ongoing expenses that the government incurs, such as salaries, wages, and maintenance costs. Reserved funds, development funds, contingencies funds, and personal funds are not typically used to pay for recurrent expenditure. Reserved funds are set aside for specific purposes, such as emergencies or future projects. Development funds are used to fund specific development projects. Contingencies funds are used to cover unforeseen expenses. Personal funds refer to money that individuals have saved for personal use, and are not related to government finances.

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Public Sector Accounting

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Question 42 Report

Capital is the

liability of tthe business to its proprietor

money owed by the company to others

money owed to the company by others

total of the long-term liabilities

total of the short-term liaqbilities

Nature And Significance Of Accounting

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Question 43 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Manufacturing cost of finished goods} & 75,000 \\ \text{Mark-up is 25%} & 5,000 \end{array}$
The net profit for the year is

N93,750

N56,250

N18,750

N17,500

N13,750

Manufacturing Accounts

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Question 44 Report

Use the following information to answer the given question
$\begin{array}{c|c} & \text{1/1/86} & \text{31/12/86} \\ & N & N \\ \hline creditors & 5,000 & 8,000 \\ stock & 1,200 & 1,100 \\ \text{Mark-up} & \text{25%} & \\ \text{Cash paid to creditors} & N7,000 & \end{array}$
Purchases for the year amounted to

N10,000

N8,000

N7,000

N6,900

N5,000

Stock Valuation

Cashbook

Nature And Significance Of Accounting

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Question 45 Report

Discount allowed is a charge to

trading account

balance sheet

profit and loss account

profit and lss appropriation account

current account

Answer Details

Discount allowed is a deduction or reduction in the selling price of goods or services offered to customers as an incentive to encourage sales. This reduction in price is considered an expense incurred by the business and is recorded in the profit and loss account of the business. Therefore, the correct answer is - profit and loss account.

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The Final Accounts Of A Sole Trader

Nature And Significance Of Accounting

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Question 46 Report

Which of the following is not a liability?

accrued wages

creditor

prepayment

insurance due but unpaid

rent arrears

Answer Details

Out of the options given, "prepayment" is not a liability. A liability is a financial obligation or debt that an individual or business owes to another entity. It represents a future payment that must be made, typically in the form of money or services. Accrued wages, creditor, insurance due but unpaid, and rent arrears are all examples of liabilities. However, a prepayment is an asset, not a liability. It is an advance payment made by a customer for goods or services that will be provided in the future. This means that the company owes the customer the goods or services in the future, and thus, the prepayment is considered as an asset on the company's balance sheet.

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Nature And Significance Of Accounting

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Question 47 Report

Acquash has sold goods on credit and received N2,200 in cash from debtors. At the end of the previous year N500 was owed by customers. The balance outstanding this year is N300. sales for the year amounted to

N2,300

N2,200

N2,000

N1,800

N1,700

Accounting Concepts

Principles Of Double Entry

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Question 48 Report

When shares are oversubscribed, the promoter nay decide to scale down the number of shareholding when this is done, the shares are being

forfrited

issued at a discount

issued on prorata

issued at par

issued at a premium

Answer Details

When shares are oversubscribed, it means that the number of people who want to buy the shares is greater than the number of shares available for sale. In such a situation, the company may decide to scale down the number of shares allotted to each investor. If the company decides to scale down the number of shares allotted to each investor, it can do so in different ways. One way is to issue shares on a prorata basis, which means that each investor will receive a proportionate number of shares based on the number of shares they applied for and the total number of shares available for sale. For example, if an investor applied for 100 shares and the total number of shares available for sale is 1,000, and the company decides to issue shares on a prorata basis, the investor will receive 10% of the shares, which is 10 shares. Issuing shares on a prorata basis ensures that all investors receive a fair allocation of shares based on their application, and it is a common practice used by companies when shares are oversubscribed. Therefore, the correct answer to this question is "issued on a prorata basis."

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Accounts Of Not-for-profit Making Organizations

Partnership Accounts

The Accounting Equation And Double Entry Principle

Principles Of Double Entry

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Question 49 Report

A delivery van was bought on credit. The transaction would be entered by the customer first in the

purchases day book