Principles Of Accounts 2025 Jamb Examination

Markup is the percentage added to the cost price to determine the selling price. The formula relating sales, cost, and markup is:
Sales = Cost of Sales + (Markup % × Cost of Sales)
Let Cost of Sales be \(x\):
\( 12,000 = x + 0.25x \)
\( 12,000 = 1.25x \)
\( x = \frac{12,000}{1.25} \)
\( x = 9,600 \).
Therefore, the cost of sales is D 9,600. If we were using margin (profit on sales), the calculation would be different, but for markup, we calculate based on the cost price.

A suspense account is a temporary account used when the debits and credits in a trial balance do not match due to one-sided errors. By placing the difference in a suspense account, the trial balance can be made to 'agree' (balance) temporarily, allowing the preparation of draft financial statements while the bookkeeper investigates and corrects the underlying errors. Once the errors are identified and fixed via journal entries, the suspense account balance is cleared and eventually closed.

In departmental accounting, expenses and incomes are apportioned based on the activity they relate to. 'Discounts received' are given by suppliers based on the amount of goods purchased and the promptness of payment. Therefore, the most logical basis for allocating this income across departments is the value of purchases made by each department. Conversely, carriage outwards, selling commissions, and bad debts are all related to sales activity and would be apportioned based on departmental sales.

Inter-departmental transfers occur when one department provides goods or services to another within the same business. In the books of the business, the 'Receiving Department' is gaining value (an increase in its costs/inputs), so its account is debited. The 'Giving Department' is providing value (a reduction in its stock/costs), so its account is credited. This ensures that the performance of each department is accurately measured by reflecting the internal movement of resources.

The Accountant General of the Federation is the administrative head of the treasury and the chief accounting officer for the government. They are responsible for the overall management of receipts and payments, the supervision of accounts across various ministries and departments, and the preparation of the annual financial statements of the federation. The Auditor General, by contrast, is responsible for auditing those accounts, and the Minister of Finance oversees broader economic policy and budgeting.

A trial balance is a list of all balances extracted from the general ledger to verify that total debits equal total credits (arithmetical accuracy) and to provide data for financial statements. Option C, however, describes a 'Control Account Reconciliation' or a 'Schedule of Debtors/Creditors'. While those lists also check for agreement, they are specifically abstracted from subsidiary ledgers to match a control account, whereas the Trial Balance is the primary summary of the entire General Ledger.

To determine profit or loss, we compare the disposal proceeds to the Net Book Value (NBV).
Cost = ₦60,000. Annual Depreciation = 10% of 60,000 = ₦6,000.
Duration of ownership:
1997, 1998, 1999, 2000 (4 full years) and Jan-June 2001 (0.5 years).
Total time = 4.5 years.
Accumulated Depreciation = \( 6,000 \times 4.5 = 27,000 \).
NBV = Cost - Accumulated Depreciation = \( 60,000 - 27,000 = 33,000 \).
Profit/Loss = Disposal Proceeds - NBV = \( 16,000 - 33,000 = -17,000 \).
Since the result is negative, it is a loss of ₦17,000.

The Net Book Value (NBV) is the historical cost of an asset minus the total depreciation accumulated since its purchase.
Cost = ₦60,000.
Annual Depreciation (Straight Line) = \( 10\% \times 60,000 = 6,000 \).
Period of usage: 1st Jan 1997 to 30th June 2001 = 4 years and 6 months (4.5 years).
Accumulated Depreciation = \( 6,000 \times 4.5 = 27,000 \).
Net Book Value = \( 60,000 - 27,000 = 33,000 \).
This value represents the unexpired cost of the asset on the company's books at the moment it was sold.

A Receipts and Payments account is a summary of the cash book for a non-profit organisation. It records all actual cash inflows and outflows during the period, regardless of whether they are revenue or capital in nature. Therefore, it explicitly discloses 'capital items' such as the purchase of equipment or the receipt of building fund donations, provided they involved cash. Items like debtors, creditors, and prepayments are accrual-based concepts that appear in the Balance Sheet or Income and Expenditure adjustments, but not in a pure cash-based Receipts and Payments account.

When a partnership is dissolved, a Realization Account is opened to close the books. Assets are transferred to the debit side of the Realization Account. If a partner decides to take over an asset instead of it being sold to an outsider, it reduces the amount the firm owes that partner. Consequently, the Partner's Capital Account is debited (to show the reduction in their equity) and the Realization Account is credited (to record the disposal of the asset from the firm's perspective).