Principles Of Accounts 2015 Jamb Examination

To maintain an accurate internal record of bank activities before a bank statement arrives, firms rely on cheque stubs (or counterfoils) and deposit slips. A cheque stub provides a record of the amount, date, and recipient of a payment made by the firm. A deposit slip (or teller's talk) provides immediate evidence of cash or cheques paid into the bank account. These documents are the primary source for making entries in the bank column of the cash book.

Capital reserves are funds created from capital profits, which are profits not earned through the normal course of trading. These reserves are generally not available for distribution as dividends. Share premium—the amount received above the par value of a share—is a classic example of a capital reserve. Retained profit, on the other hand, is a revenue reserve because it comes from the company's regular business activities.

Revenue expenditures are the day-to-day running costs of a business. In the Profit and Loss account, these expenses are subtracted from gross profit to arrive at net profit. If these expenses are 'overstated' (recorded as higher than they actually are), the resulting net profit will be mathematically lower than it should be. In accounting terminology, this means the profit is 'understated'.

Debit and credit notes are commercial documents used to adjust the value of a previous transaction. A credit note is issued by a seller to a buyer when the buyer has been overcharged or when goods are returned. A debit note is often sent by a buyer to a seller to request a credit note (e.g., for damaged goods) or by a seller to a buyer if they were accidentally undercharged on the original invoice.

To find the closing (adjusted) capital, we start with the opening capital and add any additional investments, then subtract drawings and losses.
Step 1: Add new investment.\[ 35,000 + 10,000 = 45,000 \]Step 2: Subtract losses.\[ 45,000 - 2,500 = 42,500 \]Step 3: Subtract drawings.\[ 42,500 - 3,500 = 39,000 \]

A receipt is a source document that serves as formal acknowledgement and legal evidence that money has been transferred from one party to another. While an invoice is a request for payment, the receipt is the proof that the payment was actually made. It is used in bookkeeping to record entries in the cash book.

Total income for the period consists only of revenue receipts. In an Income and Expenditure account, the opening cash balance (Bal b/d) is excluded because it is an asset, not income earned during the period.

Income = Sales of tickets (4,000) + Donations (3,000) + Subscription (6,500)

Total Income = 13,500

Under the single-entry system of bookkeeping, a business typically maintains only a cash book and personal accounts (debtors and creditors). It ignores impersonal accounts like nominal accounts (income/expenses) and real accounts (assets). This makes it an incomplete form of the double-entry system, often used by small sole traders due to its simplicity.

Profit can be determined by comparing opening capital with closing capital (assuming no drawings or new capital).
Step 1: Calculate Closing Capital.\[ \text{Total Assets} = 8,800 + 4,600 + 1,000 + 3,000 = 17,400 \]\[ \text{Closing Capital} = \text{Total Assets (17,400)} - \text{Creditors (1,000)} = 16,400 \]Step 2: Determine Profit.\[ \text{Profit} = \text{Closing Capital (16,400)} - \text{Opening Capital (13,000)} = 3,400 \]Note: Based on the question's text provided (#, 600 likely meant 4,600 to match common exam variants).

The final call (2nd call) is 55k per share. To find the total amount, multiply the call rate by the number of shares issued.
Calculation:\[ \text{Amount} = 450,000 \text{ shares} \times \text{₦}0.55 \]\[ \text{Amount} = 247,500 \]