Principles Of Accounts 2006 Jamb Examination
Question 1
Fatima withdraws goods from the business for personal use. the accounting treatment is to debit?
Goods taken for personal use are drawings. The correct entry is to debit the drawings account (to record owner’s withdrawal) and credit stock account (to reduce stock). Hence option B.
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Question 2
Use the information below to answer questions .
On January 1/2005, a machine was bought for N56,000 to last for five years with a residual value of N1000.
Calculate the yearly depreciation expense using the straight line method.
Cost = ₦56,000; Residual value = ₦1,000; Useful life = 5 years. Depreciable amount = 56,000 − 1,000 = ₦55,000. Annual depreciation = 55,000 ÷ 5 = ₦11,000. Correct option is A.
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Question 3
Use the information below to answer questions .
On January 1/2005, a machine was bought for N56,000 to last for five years with a residual value of N1000.
Calculate the yearly depreciation expense using the straight line method.
Annual depreciation = ₦11,000 (from previous calculation). Depreciation rate = (11,000 ÷ 55,000) × 100 = 20%. Correct option is D.
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Question 4
The objective of the purchase ledger control account is to established the?
Purchase ledger control account summarizes all trade creditors’ accounts. Its main purpose is to establish total credit purchases. Correct option is A.
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Question 5
Explanation: A trading account is prepared to calculate gross profit (sales minus cost of goods sold). Correct option is B.
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Question 6
Since vegetables and fruits are perishable goods, the most suitable valuation method is FIFO (First-In First-Out). This ensures older stock is considered sold first, preventing overstatement of closing stock. Correct option is C.
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Question 7
Use the information below to answer question .
Capital.....................N?
Profit and loss.............N3500
Current assets..............N?
Current liabilities.........N2000
fixed assets................N11000
The company maintains a current ratio of 3:1.
The capital balance is?
Current ratio = Current assets ÷ Current liabilities = 3:1.
Therefore Current assets = 2000 × 3 = N6000.
Total assets = Fixed + Current = 11000 + 6000 = N17000.
Capital = Assets − Liabilities = 17000 − 2000 = N15000.
Add Profit and loss = 3500, making Capital balance = N11500.
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Question 8
Use the information below to answer question .
Capital.....................N?
Profit and loss.............N3500
Current assets..............N?
Current liabilities.........N2000
fixed assets................N11000
Determine the current assets?
Given Current ratio = 3:1. Current assets = Current liabilities × 3 = 2000 × 3 = N6000.
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Question 9
The balance on the sales ledger control account represents amounts due from debtors. Any difference is transferred to the profit and loss account as it affects the company’s income. Correct option is A.
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Question 10
Tunde purchased goods from Femi by cash worth N1000 with 10% cash discount. Tunde's ledger control account is to be?
Tunde purchased goods for cash. The purchase is recorded as debit Purchases (or goods account) N1000 and credit Cash N900 after discount. The discount received of N100 is credited. Hence, his ledger control account is credited by N100.
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