Principles Of Accounts 2004 Jamb Examination
Question 41
When a new partner is admitted to a partnership there is a need to revolved the
Correct Option: D. assets and liabilities of the business
When a new partner is admitted, there is often a revaluation of both assets and liabilities to reflect their current fair values. This ensures that any gain or loss from the revaluation is shared only among the old partners before the new partner is admitted, preventing them from benefiting unfairly from old asset values or unrecorded liabilities.
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Question 42
The accounting entry to record the premium on goodwill is to debit
Correct Option: A. cash and credit old partners’ capital
When a new partner pays a premium for goodwill, the amount is brought into the business as cash. The old partners' capital accounts are credited in their sacrificing ratio to compensate them for the goodwill.
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Question 43
The expenses incurred in promoting a company are:
Correct Option: C. preliminary expenses
Preliminary expenses are the costs incurred during the formation and promotion of a company, such as legal fees, registration charges, and printing of prospectuses.
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Question 44
Debentures can be redeemed out of
Correct Option: B. existing general reserve
Debentures can be redeemed out of the existing general reserve, which is an accumulated profit set aside by the company. It is a common source used for redemption when there's no fresh issue of shares.
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Question 45
Given:
\[
\begin{array}{|l|r|}
\hline
\textbf{Share capital} & \textbf{Issued ₦} \\
\hline
600{,}000\ \text{10% Preference shares of ₦0.50 each} & \text{--} \\
600{,}000\ \text{Ordinary shares of ₦1 each} & 500{,}000 \\
\text{Capital reserves} & 250{,}000 \\
\text{Revenue reserves} & 207{,}000 \\
\text{Long-term liabilities} & 400{,}000 \\
\hline
\textbf{Total} & 1{,}357{,}000 \\
\hline
\end{array}
\]
What is the value of the authorized share capital?
Correct Option: C. ₦750,000
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Question 46
Given:
\[
\begin{array}{|l|r|}
\hline
\textbf{Share capital} & \textbf{Issued ₦} \\
\hline
600{,}000\ \text{10% Preference shares of ₦0.50 each} & \text{--} \\
600{,}000\ \text{Ordinary shares of ₦1 each} & 500{,}000 \\
\text{Capital reserves} & 250{,}000 \\
\text{Revenue reserves} & 207{,}000 \\
\text{Long-term liabilities} & 400{,}000 \\
\hline
\textbf{Total} & 1{,}357{,}000 \\
\hline
\end{array}
\]
The value of the owner’s equity is
Correct Option: C. N957,000
Owner’s equity includes:
Ordinary share capital = ₦500,000
Capital reserves = ₦250,000
Revenue reserves = ₦207,000
Total = ₦500,000 + ₦250,000 + ₦207,000 = ₦957,000
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Question 47
Share premium is an example of
Correct Option: B. capital reserves
Share premium arises when shares are issued at a price above their nominal value. It is not distributable as dividends and is classified under capital reserves, not revenue or general reserves.
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Question 48
According to the provisions of the 1999 constitution, all revenue generated by the Federal Government must be paid into the
Correct Option: B. Federation account
According to the 1999 Constitution of Nigeria (Section 162), all revenue collected by the federal government, except those specifically exempted, must be paid into the Federation Account, to be shared among the federal, state, and local governments.
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Question 49
The budget statement presented to the legislature by the Chief Executive is called
Correct Option: C. an appropriation bill
The Chief Executive presents the appropriation bill to the legislature. This bill outlines the government's proposed expenditures and must be approved before funds can be legally spent.
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Question 50
The statement of assets and liabilities in the public sector can be described as the
C. balance sheet of government
The statement of assets and liabilities in the public sector is referred to as the balance sheet of government because it shows the financial position — assets owned and liabilities owed — at a particular point in time.