Principles Of Accounts 2004 Jamb Examination
Question 31
In the balance sheet of a not-for profit making organization, subscription paid in advance is regarded as a
Correct option: B. current liability
Subscription paid in advance is money received for future periods; hence, it is treated as a current liability until the income is earned.
Not clear enough?
Question 32
A rapidly growing business organisation with multiple units that is interested in comparing the performances and weakness of each unit should adopt
Correct option: C. departmental accounts
Departmental accounts help compare the performance and weaknesses of each unit or department in a multi-unit organization.
Not clear enough?
Question 33
| Description | Dept. S (₦) | Dept. T (₦) | Total (₦) |
|---|---|---|---|
| Gross profit b/d | 6,000 | 4,000 | 10,000 |
| Less: Salaries & Wages | 1,800 | 1,200 | 3,000 |
| Electricity | ? | ? | 2,000 |
| Depreciation | 60 | ? | 1,000 |
| Net profit c/d | ? | 1,600 | 4,000 |
| Total | 6,000 | 4,000 | 10,000 |
What is the net profit by department S?
Not clear enough?
Question 34
| ABCDEFGHIJK | ABCDE₦ | EHIJK ₦ | ₦ |
|---|---|---|---|
| Gross Profit / | 36000 | 34000 | 31000 |
| Net Profit | 30,000 | 32,000 | 33,000 |
| Revenue | 60,000 | 40,000 | 30,000 |
| Expenditure | 30,000 | - | 10,000 |
The depreciation to be charged to department T is
Correct option: B. ₦400
Not clear enough?
Question 35
How are credit sales by a department treated?
Correct Option: A. the same way as normal debtors’ transactions
Credit sales by a department are treated just like any other credit sales — they result in the creation of debtors (accounts receivable). These are recorded in the same manner as normal debtors’ transactions in the accounting records.
Not clear enough?
Question 36
Discounts granted to branch customers are treated as a debit to branch
Correct Option: D. discount account and a credit to branch debtors’ account
When a discount is granted to branch customers, it reduces the amount they owe (i.e., reduces debtors). Therefore, the branch discount account is debited (as an expense) and the branch debtors’ account is credited (to reduce the receivable).
Not clear enough?
Question 37
Transfers from the head office to branches are best carried out at
Correct Option: A. cost price
Transfers from the head office to branches are best carried out at cost price to ensure accurate assessment of the branch's true profitability and avoid overstating profits through internal mark-ups.
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Question 38
On dissolution, the final distribution of cash to partners is based on
Correct Option: D. capital balances
On dissolution, after settling liabilities, the final cash is distributed to partners based on their capital balances, unless the partnership agreement states otherwise.
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Question 39
Jumoke and Kunle have a original investment of ₦25,000 and ₦15,000 respectively in a partnership. The articles of partnership provide 3%interest on capital and salaries of ₦1,500 and ₦1,000 respectively for the PARTIES. The profit&loss are to be shared in the ration 3:2 miscellaneous expenses of ₦2,500 were incurredwith gross profit of ₦6,500 during the financial year.
The balance of profit and loss account will be
Correct Option: A. ₦4,000
Breakdown:
Initial data:
Jumoke capital: ₦25,000
Kunle capital: ₦15,000
Interest on capital: 3%
Salaries: Jumoke ₦1,500, Kunle ₦1,000
Gross profit: ₦6,500
Miscellaneous expenses: ₦2,500
Net Profit
Net Profit = Gross Profit − Miscellaneous Expenses
= 6,500 − 2,500 = ₦4,000
Not clear enough?
Question 40
Jumoke andKunle have a original investment of ₦25,000 and ₦15,000 respectively in a partnership. The articles of partnership provide 3%interest on capital and salaries of ₦1,500 and ₦1,000 respectively for the PARTIES. The profit&loss are to be shared in the ration 3:2 miscellaneous expenses of ₦2,500 were incurredwith gross profit of ₦6,500 during the financial year.
What is Kunle’s share of the profit?
Correct Option: D. ₦120
Breakdown:
Initial data:
Net profit available for appropriation = ₦4,000
Interest on capital:
– Kunle: 3% of ₦15,000 = ₦450
Salary: Kunle = ₦1,000
Total appropriation to Kunle before sharing balance = ₦450 + ₦1,000 = ₦1,450
Remaining profit after interest and salaries:
₦4,000 − (₦1,200 interest + ₦2,500 salaries) = ₦300
Profit sharing ratio = Jumoke : Kunle = 3 : 2
Kunle’s share of ₦300 = 2/5 × 300 = ₦120
Total share for Kunle = ₦1,450 + ₦120 = ₦1,570
But that’s not among the options — the question likely means Kunle’s share of the remaining ₦300 profit, not total appropriation.
Kunle’s share = 2/5 × 300 = ₦120