Principles Of Accounts 2011 Jamb Examination
Principles Of Accounts 2011 Jamb Examination
Question 31
The transactions relating to liquidation in partnership account is drawn by using?
When a partnership is dissolved or liquidated, a temporary account called the Realization Account is opened. Its purpose is to record the sale (realization) of assets and the payment of liabilities. The final balance of this account represents the profit or loss on dissolution, which is then shared among the partners in their profit-sharing ratio.
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Question 32
The cost method of charging goods to branch is used where?
The cost price method is often preferred when dealing with perishable goods or items whose prices fluctuate rapidly. Since a fixed selling price (markup) cannot be easily maintained for perishables due to potential waste or rapid price changes, the head office sends the goods at cost, and the branch determines the selling price based on current market conditions.
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Question 33
The correct entries to record goods transferred to branch from head office is to debit?
In branch accounting (specifically the Branch Stock System), when the Head Office sends goods to a branch, it increases the stock at the branch and reduces the stock available at the Head Office. The double entry is:
\[ (\text{Dr}) \text{ Branch Stock Account} \]
\[ (\text{Cr}) \text{ Goods Sent to Branch Account} \]
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Question 34
The two accounts that are normally opened in the head office when goods are transferred to a branch are?
Under the system where the Head Office maintains control over branch transactions, the two primary accounts used to track inventory movement are the Branch Stock Account (to track the physical movement and value of goods at the branch) and the Goods Sent to Branch Account (which acts as a contra-purchases account for the Head Office).
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Question 35
Goods invoiced to a branch can be sent using?
There are three common ways to invoice goods to a branch:
1. At Cost Price: Sending at the price purchased by the head office.
2. At Selling Price: Sending at the price the branch is expected to sell at.
3. At Cost plus a percentage (Markup): Sending at cost plus a fixed percentage of that cost (e.g., Cost + 20%).
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Question 36
The major point of agreement carried by the partnership deed is?
While many things can be included in a partnership deed, the most critical element for the financial operation of the firm is the Profit and Loss Sharing Ratio. This specifies how the remaining surplus or deficit will be shared after all other appropriations (like salaries or interest) are made. Without this deed, the law usually assumes profits are shared equally.
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Question 37
Use the information below to answer the question: Keme and Kemi are in partnership sharing profit and losses in the ratio 3:2.
Capital - Keme.............N20 000
........ - Kemi.............N10 000
Drawings - Keme.............N2 000
........ - Kemi.............N3 000
Profit......................N6 000
Interest on capital.........5%
Interest on drawings........10%
The interest on Kemi's capital is?
Capital - Keme.............N20 000
........ - Kemi.............N10 000
Drawings - Keme.............N2 000
........ - Kemi.............N3 000
Profit......................N6 000
Interest on capital.........5%
Interest on drawings........10%
The interest on Kemi's capital is?
Interest on capital is calculated as a percentage of the opening capital balance. \[ \text{Kemi's Capital} = 10,000 \] \[ \text{Interest Rate} = 5\% \] \[ \text{Interest} = \frac{5}{100} \times 10,000 = 500 \]
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Question 38
Using the data from the previous question, the interest on Keme's drawings is calculated as?
Interest on drawings is calculated based on the total amount withdrawn by the partner during the period.
\[ \text{Keme's Drawings} = 2,000 \]
\[ \text{Interest Rate} = 10\% \]
\[ \text{Interest} = \frac{10}{100} \times 2,000 = 200 \]
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Question 39
Which of the following can be used on admission of a new partnership?
When a new partner is admitted, the existing assets and liabilities of the firm are often revalued to reflect their current market value. A Revaluation Account is opened to determine the net gain or loss from this exercise, which is shared among the *old* partners in their *old* profit-sharing ratio before the new partner joins.
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Question 40
Goodwill is determined using?
Goodwill is an intangible asset that represents the 'good name' or reputation of a business. It is determined by the business's ability to earn super-profits, which is heavily influenced by its location, customer relations, brand recognition, and overall standing in the market.
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