Principles Of Accounts 2004 Jamb Examination
Question 21
Given :
\[
\begin{array}{|l|r|}
\hline
\textbf{Description} & \textbf{₦} \\
\hline
\text{Paid by cheque} & 671 \\
\text{Paid by cash} & 70 \\
\text{Accrued b/f} & 65 \\
\text{Accrued c/f} & 115 \\
\hline
\end{array}
\]
Determine how much to be charged profit and loss account
The correct answer is C. ₦791
Explanation:
Amount charged to Profit and Loss = (Paid by cheque + Paid by cash) + Accrued c/f – Accrued b/f
= (671 + 70) + 115 – 65
= 741 + 50
= ₦791
Not clear enough?
Question 22
In converting single entry to final account, the balancing figures on the income and expenses accounts are transferred to the
The correct answer is D. profit and loss account
In converting single entry to final accounts, the balancing figures (net results) from income and expenses accounts are transferred to the profit and loss account to determine the net profit or loss for the period.
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Question 23
\[
\begin{array}{|l|r|}
\hline
\textbf{Description} & \textbf{₦} \\
\hline
\text{Beginning inventory} & \text{?} \\
\text{Purchases} & \text{?} \\
\text{Ending inventory} & 4{,}800 \\
\text{Sales} & 12{,}800 \\
\text{Wages} & 1{,}040 \\
\text{Gross profit} & 5{,}900 \\
\hline
\end{array}
\]
The beginning inventory was estimated at 80% of sales.
Determine the amount for the beginning inventory
The correct answer is B. ₦10,240
Beginning inventory = 80% of sales
= 0.8 × 12,800
= ₦10,240
Not clear enough?
Question 24
\[
\begin{array}{|l|r|}
\hline
\textbf{Description} & \textbf{₦} \\
\hline
\text{Beginning inventory} & \text{?} \\
\text{Purchases} & \text{?} \\
\text{Ending inventory} & 4{,}800 \\
\text{Sales} & 12{,}800 \\
\text{Wages} & 1{,}040 \\
\text{Gross profit} & 5{,}900 \\
\hline
\end{array}
\]
The beginning inventory was estimated at 80% of sales.
What is the figure for purchases?
The correct answer is A. N2,400
Cost of Goods Sold (COGS) = Sales – Gross Profit
= 12,800 – 5,900 = ₦6,900
COGS = Beginning Inventory + Purchases + Wages – Ending Inventory
Beginning Inventory = 80% of Sales = 0.8 × 12,800 = ₦10,240
Substitute:
6,900 = 10,240 + Purchases + 1,040 – 4,800
6,900 = 6,480 + Purchases
Purchases = 6,900 – 6,480 = ₦420
This value is not in the options, so check if wages should be included or excluded.
If wages are part of purchases or considered separately, exclude wages:
COGS = Beginning Inventory + Purchases – Ending Inventory
6,900 = 10,240 + Purchases – 4,800
6,900 = 5,440 + Purchases
Purchases = 6,900 – 5,440 = ₦1,460 (also not an option)
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Question 25
Cost classification in relation to charges is determine by the level of
The correct answer is C. activity
Cost classification in relation to charges is determined by the level of activity because costs are often categorized as fixed, variable, or mixed based on how they change with the level of business activity.
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Question 26
\[
\begin{array}{|l|r|}
\hline
\textbf{Description} & \textbf{₦} \\
\hline
\text{Materials consumed} & 16{,}600 \\
\text{Direct cost} & 5{,}400 \\
\text{Factory rent} & 2{,}300 \\
\text{Factory lighting} & 1{,}200 \\
\hline
\end{array}
\]
Cost of production to be transferred at cost plus 20% mark-up
The gross profit on manufacture is
Materials consumed= ₦16,600
Direct cost= ₦5,400
Factory rent = ₦2,300
Factory lighting = ₦1,200
Total Cost of Production 16,600 + 5,400 + 2,300 + 1,200 = ₦25,500
Gross Profit 20% mark-up = 0.20 x 25,500 = ₦5,100
Not clear enough?
Question 27
\[
\begin{array}{|l|r|}
\hline
\textbf{Description} & \textbf{₦} \\
\hline
\text{Materials consumed} & 16{,}600 \\
\text{Direct cost} & 5{,}400 \\
\text{Factory rent} & 2{,}300 \\
\text{Factory lighting} & 1{,}200 \\
\hline
\end{array}
\]
Cost of production to be transferred at cost plus 20% mark-up
The market value of goods produced is
The correct answer is B. ₦30,600
Market value = Cost of production + 20% mark-up
Market value = ₦25,500 + 0.20 × â‚¦25,500
= ₦25,500 + ₦5,100 = ₦30,600
Not clear enough?
Question 28
On January 1, 2000, a club’s assets and liabilities were as follows
\[
\begin{array}{|l|r|}
\hline
\textbf{Description} & \textbf{₦} \\
\hline
\text{Club house} & 8{,}000 \\
\text{Subscription in arrears} & 300 \\
\text{Cash} & 1{,}000 \\
\text{Wages owed} & 100 \\
\hline
\end{array}
\]
The club has 50 members and annual subscription is N100 per member. Subscription received is ₦4,000 and this includes 1999 arrears of ₦200
The accumulated fund is
\[
\begin{aligned}
\text{Assets:} \\
\quad \text{Club house} &= N8{,}000 \\
\quad \text{Subscription in arrears} &= N300 \\
\quad \text{Cash} &= N1{,}000 \\
\text{Total Assets} &= 8{,}000 + 300 + 1{,}000 = N9{,}300 \\
\\
\text{Liabilities:} \\
\quad \text{Wages owed} &= N100 \\
\\
\text{Accumulated Fund} &= \text{Total Assets} - \text{Total Liabilities} \\
&= 9{,}300 - 100 = \boxed{N9{,}200}
\end{aligned}\]
Not clear enough?
Question 29
On January 1, 2000, a club’s assets and liabilities were as follows
\[
\begin{array}{|l|r|}
\hline
\textbf{Description} & \textbf{₦} \\
\hline
\text{Club house} & 8{,}000 \\
\text{Subscription in arrears} & 300 \\
\text{Cash} & 1{,}000 \\
\text{Wages owed} & 100 \\
\hline
\end{array}
\]
The club has 50 members and annual subscription is N100 per member. Subscription received is ₦4,000 and this includes 1999 arrears of ₦200
In the balance sheet, the subscription in arrears will be
Subscription expected for 2000 = 50 × 100 = ₦5,000
Subscription received (including 1999 arrears) = ₦4,000
Less: 1999 arrears paid
Subscription received for 2000 = ₦200 + 4,000 - 200 = ₦3,800
Unpaid for 2000 (arrears) = 5,000 – 3,800 = ₦1,200
Unpaid from 1999 = 300 - 200 = ₦100
Total subscription in arrears (to appear in balance sheet) = 1,200 + 100 = ₦1,300
Not clear enough?
Question 30
Where the debit side of the income and expenditure account is higher than the credit side, the difference is a
A. Deficit
When the debit side (expenses) of the income and expenditure account is higher than the credit side (income), the result is a deficit — meaning the organization has spent more than it earned.