Principles Of Accounts 2011 Jamb Examination

Promoters are the individuals who conceive the idea of forming a business entity. They undertake the necessary preliminary steps to bring the company into existence, such as preparing legal documents like the Memorandum and Articles of Association, negotiating initial contracts, and managing the registration process with the relevant authorities. While they may eventually become shareholders, their specific role as 'founders' is defined by these pre-incorporation activities.

The Consolidated Revenue Fund (CRF) is the main treasury account of the government. By law, all revenues and monies raised or received by the federation (such as taxes, duties, and fees) must be paid into this fund, unless specifically designated for another purpose by an Act of the National Assembly. No money can be withdrawn from this fund except to meet expenditure that is charged upon the fund by the Constitution or an Appropriation Act.

Petroleum Income Tax (PPT) is a tax levied on the profits of companies engaged in upstream petroleum operations (exploration and production). In the Nigerian economy, the oil and gas sector is the primary driver of foreign exchange and government revenue. Consequently, the taxes collected from oil companies significantly outweigh those from personal income, imports, or non-oil corporate sectors.

Share premium occurs when a company issues shares at a price higher than their nominal (par) value. The premium is the difference between the issue price and the par value.
The nominal value per share is \(N2.00\) and the issue price (market value) is \(N5.50\).
Calculation of premium per share: \[ \text{Premium per share} = N5.50 - N2.00 = N3.50 \] Calculation of total share premium for 120,000 shares: \[ \text{Total Share Premium} = 120,000 \times 3.50 \] \[ \text{Total Share Premium} = 420,000 \] Therefore, the share premium account will be credited with N420,000.

The Accountant-General of the Federation is the Chief Accounting Officer of the receipts and payments of the Federation. They are responsible for the administration of the Consolidated Revenue Fund and other public funds. As the head of the treasury, they are a primary signatory to government accounts, ensuring that all withdrawals and payments are properly authorised and documented according to financial regulations.

The Treasurer of a local government is the professional head of the Finance Department. While the Chairman is the political head and the accounting officer in a general sense, the Treasurer is the designated Chief Accounting Officer responsible for the actual management of financial records, custody of funds, and the preparation of final accounts and financial statements. They ensure that local government spending adheres to the approved budget.

A General Warrant is a statutory instrument signed by the Minister of Finance at the beginning of a financial year. This warrant authorises the Accountant-General of the Federation to withdraw money from the Consolidated Revenue Fund to meet the expenditure necessary to carry on the services of the Government until the Appropriation Act is passed or according to the approved budget. It serves as the legal authority for the release of funds.

Average stock is calculated by taking the sum of the opening stock and the closing stock and dividing it by two. Based on the provided image/data:
Opening Stock = \(N24,000\)
Closing Stock = \(N17,000\)
The formula is: \[ \text{Average Stock} = \frac{\text{Opening Stock} + \text{Closing Stock}}{2} \] Substituting the values: \[ \text{Average Stock} = \frac{24,000 + 17,000}{2} \] \[ \text{Average Stock} = \frac{41,000}{2} = 20,500 \]

The Cost of Goods Sold (COGS) represents the direct costs attributable to the production or purchase of the goods sold by a company. It is calculated using the following formula:
Cost of Goods Sold = Opening Stock + Purchases - Closing Stock
From the trading data provided:
Opening Stock = N14,000
Purchases = N60,000
Closing Stock = N17,000
Step-by-step solution:
Cost of Goods Available for Sale = 14,000 + 60,000 = 74,000
COGS = 74,000 - 17,000
COGS= 57,000
This figure represents the cost incurred to generate the sales revenue for the period.