Principles Of Accounts 2016 Jamb Examination
Principles Of Accounts 2016 Jamb Examination
Question 11
Segun Ojo didn’t keep her books on double principle. On 1st Jan, 2014, cash in hand was 850, bank overdraft 3,500, debtor 15,500, stock 18,000, fittings 9,000 and creditors 12,700.
Compute the capital as at 1st Jan, 2014.
Compute the capital as at 1st Jan, 2014.
To find the opening capital under the single-entry system, we prepare a Statement of Affairs, which calculates Capital as Total Assets minus Total Liabilities.\[ \text{Total Assets} = \text{Cash (850)} + \text{Debtors (15,500)} + \text{Stock (18,000)} + \text{Fittings (9,000)} = 43,350 \]\[ \text{Total Liabilities} = \text{Bank Overdraft (3,500)} + \text{Creditors (12,700)} = 16,200 \]\[ \text{Capital} = \text{Total Assets} - \text{Total Liabilities} \]\[ \text{Capital} = 43,350 - 16,200 = 27,150 \]
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Question 12
Keeping records under single entry system has the advantage of
The single-entry system is often used by small businesses because it is simple and inexpensive to maintain. It does not require a deep knowledge of accounting principles or complex double-entry rules (debits and credits). While it lacks the accuracy, completeness, and fraud-detection capabilities of the double-entry system, its primary 'advantage' is that it is easy to operate for those with limited bookkeeping skills.
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Question 13
Which of the following is true in public sector accounting? Cost of assets is
In traditional government (public sector) accounting, particularly under the cash basis of accounting, non-current assets are not capitalised and depreciated over time. Instead, the full cost of the asset is recorded as an expenditure (expensed) in the year it is purchased. This is because the focus is on budgetary control and the actual flow of funds rather than matching costs with revenue over the asset's useful life.
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Question 14
Which of the following accounts is debited when a delivery van is sold for cash?
According to the rules of double-entry bookkeeping, you debit the account that receives the value. When a delivery van is sold for cash, the business receives cash, so the Cash Account must be debited. Conversely, the asset account (Delivery Van) or a Disposals Account would be credited to reflect the reduction in assets.
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Question 15
When shares are sold at more than the par value, they are said to have been issued at
When a company issues shares at a price higher than their nominal (par) value, the excess amount is called a 'premium'. For example, if a share with a par value of ₦1.00 is sold for ₦1.50, the ₦0.50 difference is the share premium. This premium is recorded in a separate 'Share Premium Account' on the balance sheet and cannot be used to pay dividends.
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Question 16
Calculate the total purchase of a business from the given information:
Cash purchases: 3,000
Payments to creditors: 53,000
Creditors at the beginning: 4,000
Creditors at the end: 2,000
Cash purchases: 3,000
Payments to creditors: 53,000
Creditors at the beginning: 4,000
Creditors at the end: 2,000
Total purchases equal Cash Purchases plus Credit Purchases. We first find Credit Purchases using the creditors' records.\[ \text{Credit Purchases} = \text{Closing Creditors} + \text{Payments to Creditors} - \text{Opening Creditors} \]\[ \text{Credit Purchases} = 2,000 + 53,000 - 4,000 = 51,000 \]\[ \text{Total Purchases} = \text{Cash Purchases (3,000)} + \text{Credit Purchases (51,000)} = 54,000 \]Note: Given the options provided, if we assume a typo in the question's source data, 54,000 is the correct mathematical result.
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Question 17
Which of the following is shown in the profit and loss appropriation account of a company
The Profit and Loss Appropriation Account is used to show how the net profit of a company is distributed. Items like transfers to reserves and dividends paid to shareholders are recorded here. Interest charges, depreciation, and directors' emoluments are operating expenses and are recorded in the main Profit and Loss Account before reaching the net profit stage.
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Question 18
Dangote acquired Dantata’s business for ₦350,000. The total assets were ₦820,000 and liabilities amounted to ₦640,000. The double entry to record the goodwill in the books is debit
Goodwill is the excess of the purchase price over the fair value of net assets acquired.
Net Assets = Assets (820,000) − Liabilities (640,000) = 180,000
Goodwill = Purchase Price (350,000) − Net Assets (180,000) = 170,000
To record goodwill, debit the Goodwill Account (an intangible asset) and credit the Purchase of Business Account (or the account used to track acquisition costs) to account for the difference.
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Question 19
The income and expenditure account of a club is the same as
The Income and Expenditure Account is prepared by non-profit making organisations (like clubs and societies) to determine the surplus or deficit for a financial period. It is conceptually identical to the Profit and Loss Account of a commercial business. Both accounts follow the accrual basis of accounting, recording all revenue income and revenue expenditure for the period to determine the net result of operations.
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Question 20
Goods stolen at the branch is debited to
When goods are stolen or lost at a branch, it represents an abnormal loss. In branch accounting systems (especially the stock and debtors system), such losses are removed from the Branch Stock Account (credited) and transferred to a 'Defalcations Account' or a 'Branch Stock Loss Account' (debited). This allows the business to isolate and track the value of lost or stolen inventory separately from normal trading expenses.