Principles Of Accounts 2005 Jamb Examination
Question 1
The double-entry bookkeeping system was developed by Luca Pacioli in 1494.
Correct option: B.
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Question 2
The conservatism (prudence) concept requires assets and income not to be overstated, and liabilities/expenses not understated. This strongly affects asset valuation and income determination.
Correct option: C.
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Question 3
Purchases on credit are recorded by debiting Purchases Account (or Inventory) and crediting Accounts Payable (liability).
Correct option: C.
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Question 4
Liabilities = ₦23,700
Current assets = ₦20,300
Fixed assets = ₦64,500
What is the capital introduced by the proprietor?
Capital = Assets – Liabilities.
Total Assets = 20,300 + 64,500 = ₦84,800.
Capital = 84,800 – 23,700 = ₦61,100. Wait check carefully —
Total assets = ₦84,800, Liabilities = ₦23,700 ⇒ Capital = ₦61,100.
Correct option: B.
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Question 5
Rent = ₦10,000
Rates = ₦5,000
Capital = ₦50,000
Salaries = ₦14,000
Cash = ₦26,000
Creditors = ₦5,000
The total trial balance is?
Total debits = Rent (10,000) + Rates (5,000) + Salaries (14,000) + Cash (26,000) = ₦55,000.
Total credits = Capital (50,000) + Creditors (5,000) = ₦55,000.
Total trial balance = 55,000 + 55,000 = ₦110,000.
Correct option: A.
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Question 6
Discount allowed is an expense to the business; therefore, it is recorded on the debit side of the three-column cash book.
Correct option: A.
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Question 7
Rent received is “other income” and is added after calculating gross profit, contributing directly to net profit.
Correct option: C.
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Question 8
In a three-column cash book, the discount allowed is shown on the?
discount allowed is recorded on the debit side since it is an expense.
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Question 9
Provision for bad debt calculation:
Jan. 2003 provision = ₦1000
Debtors (Dec. 2003) = ₦20000
Bad debt to be written off = ₦2000
Provision = 10% of debtors.
How much is to be charged to profit and loss account as provision for bad debt?
Debtors after write-off = ₦20,000 – ₦2,000 = ₦18,000.
Provision = 10% × ₦18,000 = ₦1,800.
Old provision = ₦1,000.
Additional provision = ₦800 charged to profit and loss.
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Question 10
Goods withdrawn reduce purchases (contra entry), hence credited to Purchases A/c and debited to Drawings A/c.
Correct option: B.