Principles Of Accounts 2016 Jamb Examination

When a debt previously written off as 'bad' is eventually paid, the recovery process involves two distinct steps to maintain a proper audit trail. First, the debtor's account must be reinstated to show they paid. Second, the cash is recorded. The actual recording of the income (the 'recovery') involves: (1) Reinstating the debtor by debiting the Debtors account and crediting the Bad Debts Recovered account. (2) Recording the cash by debiting the Cash/Bank account and crediting the Debtors account. In simplified exam contexts, the 'recovery' entry itself is essentially a debit to Cash/Debtors and a credit to the Bad Debt Recovered account, which is then transferred to the credit side of the Profit and Loss account.

The Memorandum and Articles of Association are constitutional documents that define the company's external powers (Memorandum) and internal rules/governance (Articles). Objects, location (Registered Office), and directors' powers are fundamental parts of these documents. However, bank signatories are administrative details that change frequently. They are typically decided by a board resolution and recorded in board minutes rather than being fixed in the company's formal constitution.

Cost control is the process of regulating the costs of a business to ensure they remain within the limits of the budget or 'targeted' costs. It involves a continuous cycle: setting standards (targets), measuring actual performance, comparing actuals against targets to find variances, and taking corrective action (adjustments) to bring costs back in line. This is a management accounting function aimed at improving profitability and efficiency.

The Sales Ledger Control Account (also known as the Total Debtors Account) is a summary account that records the aggregate balance of all individual customers' accounts in the sales ledger. It provides a double-check on the accuracy of individual entries and represents the total amount currently owed to the business by its credit customers (debtors).

In branch accounting, particularly under the stock and debtors system, specific accounts are used to maintain control over inventory and receivables. Branch Stock, Goods Sent to Branch, and Branch Adjustment (used to track loading/unrealised profit) are standard. A 'Branch Debtors Account' is also standard if credit sales occur at the branch. However, based on the options provided in the context of the 'Goods Sent' process specifically, all listed are typical, but if we must select the 'exception' in a simplified setup, often only stock-related accounts are strictly necessary for the 'sending' event. In most academic contexts, all four are valid; however, 'Branch Debtors' is the most likely to be excluded if the branch is purely a stock point with no credit authority.

Traditionally, government accounting and the public sector have operated on a cash basis. This means transactions are recorded only when cash is actually received or paid out, rather than when they are earned or incurred. While many modern governments are transitioning to the accrual basis (IPSAS), the foundational answer for academic questions regarding public sector accounting is the cash basis, as it facilitates budgetary control and accountability of physical funds.

Closing capital is found by subtracting closing liabilities from closing assets (Statement of Affairs method).
Step-by-step calculation for 31/12/2014:
Closing Assets: Cash in hand (1,200) + Cash at bank (2,500) + Debtors (10,000) + Stock (20,500) + Furnishing (4,000) = 38,200
Closing Liabilities: Creditors = 17,000
Calculation: Capital = Total Assets - Total Liabilities
Capital = 38,200 - 17,000 = 21,200
 

According to the Partnership Act of 1890, in the absence of a formal partnership deed or agreement specifying a profit-sharing ratio, all partners are entitled to share equally in the profits of the business and must contribute equally to any losses sustained. This rule applies regardless of how much capital each partner originally contributed or how much time they spend working in the business.

In departmental accounting, expenses are apportioned using the most logical basis. Rent is typically apportioned based on the floor space occupied by each department.
Step 1: Calculate the total floor space.\[ \text{Total Space} = 80 (X) + 60 (Y) + 60 (Z) = 200 \text{ sq metres} \]Step 2: Calculate the proportion for Department Z.\[ \text{Proportion} = \frac{\text{Floor space of Z}}{\text{Total floor space}} = \frac{60}{200} \]Step 3: Apply the proportion to the total rent.\[ \text{Rent for Z} = \frac{60}{200} \times 6,000 \]\[ \text{Rent for Z} = 0.3 \times 6,000 = 1,800 \]

An error of original entry occurs when an incorrect amount is recorded in the books of prime entry (like the Sales Day Book) and that incorrect figure is then posted throughout the ledger. In this case, the transaction itself was valid, but the figure entered (₦2,750 instead of ₦2,570) was wrong from the very start. Unlike an error of commission, which involves putting a correct amount into the wrong person's account, an error of original entry involves a basic clerical mistake in the numerical value recorded.