JAMB Principles of Accounts 2000 past questions and answers

On November 1, 1998, Zaria Holdings owed ₦13,600 in respect of a creditor. On November 15, it purchased goods worth ₦69,000 and paid a cheque of ₦51,600. On November 29, one of the Holdings' cheques worth ₦3,000 was returned while the creditor granted ₦1,500 discount. The amount owed by Zaria Holdings as at November 29 is

1. A.₦32,500
2. B.₦32,000
3. C.₦31,000
4. D.₦29,500.

To write off bad debt, debit

1. A.debtor's account and credit provision for bad debt
2. B.bad debt account and credit debtor's account
3. C.debtor's account and credit bad debt
4. D.provision for bad debt account and credit debtor's account.

In order to make the cash book balance equal to the bank statement, it is usual to add

1. A.uncredited cheques
2. B.direct payments by bank
3. C.bank charges
4. D.unpresented cheques.

Use the information below to answer questions 4 and 5.
(₦)
Sales 20,000
Cost of sales 10,000
Operating expenses 2,500
Expenses prepaid included in operating expense 500
Calculate the net profit

1. A.₦12,500
2. B.₦10,000
3. C.₦8,000
4. D.₦7,500.

Use the information below to answer questions 4 and 5.
(₦)
Sales 20,000
Cost of sales 10,000
Operating expenses 2,500
Expenses prepaid included in operating expense 500
What is the gross profit margin?

1. A.100%
2. B.50%
3. C.40%
4. D.30%.

The main objective of bookkeeping is to record economic

1. A.transactions systematically for routine managerial decision-making
2. B.events clearly to ensure adequate checks and balances
3. C.events clearly to facilitate strategic managerial decision-making
4. D.transactions systematically to ascertain the financial position of a business.

A source document that aids the ascertainment of amount paid out of current account is the

1. A.teller
2. B.cheque stub
3. C.cheque
4. D.teller stub.

Yahuza Enterprises Trial Balance (Extracts) as at Dec. 31, 1998.
Capital ₦21,000 (Cr)
Premises ₦90,000
Debtors ₦35,000
Provisions 1/1/98: Depreciation ₦9,000; Bad and doubtful debts ₦1,500
If premises is to be depreciated at 10% on cost and a 5% provision is to be allowed on debtors, the total asset in the balance sheet is

1. A.₦125,000
2. B.₦114,500
3. C.₦105,500
4. D.₦105,250.

The most convenient cash book used by a petty trader operating in an area where there is no banking facility is

1. A.four column
2. B.three column
3. C.single column
4. D.two column.

A general journal contains

1. A.date, narration, folio, debit and credit
2. B.date, narration, folio, debit and purchases
3. C.folio, credit, date, debit and sales
4. D.debit, credit, narration, date and discount.

Which of the following errors will affect the trial balance total?

1. A.posting discount allowed to the debit side of the discount allowed account
2. B.omission of one account from the list when extracting from the ledgers
3. C.failure to post sales of ₦2,000 and purchases of ₦2,000 from the subsidiary ledgers
4. D.omission of sales of ₦3,000 and purchases of ₦2,000.

An expense account is closed by a debit to

1. A.an asset account and a credit to the expense account
2. B.the expense account and a credit to an asset account
3. C.profit and loss account and a credit to the expense account
4. D.the expense account and a credit to profit and loss account.

The accounting convention which stipulates that money or goods taken from the business by the owner for personal use should be treated as deductions from capital is

1. A.cost
2. B.prudence
3. C.consistency
4. D.entity.

Use the information below to answer questions 15 and 16.
(₦)
Cost of raw materials consumed 300,600
Carriage inwards 6,700
Returns of raw materials 10,800
Closing stock of raw materials 100,250
Manufacturing wages 27,000
Lighting, power, insurance and rent relating to the factory are apportioned 1/3, 2/5, 1/6 and 1/7 with totals ₦30,000; ₦75,000; ₦36,000 and ₦56,000 respectively.
What is the cost of the opening raw materials?

1. A.₦418,350
2. B.₦404,950
3. C.₦400,250
4. D.₦398,250.

Use the information below to answer questions 15 and 16.
(₦)
Cost of raw materials consumed 300,600
Carriage inwards 6,700
Returns of raw materials 10,800
Closing stock of raw materials 100,250
Manufacturing wages 27,000
Lighting, power, insurance and rent relating to the factory are apportioned 1/3, 2/5, 1/6 and 1/7 with totals ₦30,000; ₦75,000; ₦36,000 and ₦56,000 respectively.
The production cost of finished goods is

1. A.₦524,600
2. B.₦408,600
3. C.₦381,600
4. D.₦327,600.

Amin Ltd. Creditors Ledger Control Account (Extracts) (₦)
Beginning control account balances: Debit 32,000; Credit 61,000
Purchases during the year: Cash 30,000; Credit 60,000
Payment to suppliers: Cash 13,000; Cheque 29,000
Debtor's contra 6,000
The closing control account balance is

1. A.₦41,000
2. B.₦65,000
3. C.₦71,000
4. D.₦77,000.

Given:
(₦)
Depreciation of plant and machinery 1,600
Factory rent 650
Indirect wages 695
General indirect expenses 726
Lubricants 1235
Carriage inwards 829
Factory power 350
Bank charges 612
Carriage outwards 2,900
Determine the total factory overhead cost.

1. A.₦4,485
2. B.₦5,256
3. C.₦6,085
4. D.₦6,556.

Given:
Cash book items: (₦)
Paid to suppliers 10,800
Expenses paid 6,900
Drawings made 900
Balances at start 15,750
Balances at end 3,870
Drawings from bank to shop 1720
Determine the receipt from debtors.

1. A.₦22,470
2. B.₦17,470
3. C.₦8,440
4. D.₦5,000.

The items entered in an opening statement of affairs of an enterprise that keeps incomplete record are

1. A.sales income
2. B.receipt from debtors
3. C.fixtures and fittings
4. D.rent paid.

In a manufacturing company, the total cost of goods produced is equivalent to

1. A.purchases
2. B.sales
3. C.cost of goods sold
4. D.cost of materials used.

Given:
Sales Ledger Control Account (Extracts) (₦)
Balance b/f 10,600
Total cash payments by debtors 32,275
Total credit sales 59,193
Discount received 9,700
Balance c/f 20,751
Discount allowed 2890
Determine the sales returns

1. A.₦24,577
2. B.₦13,877
3. C.₦7,067
4. D.₦2,890.

The simplest form of single entry procedure consists of keeping a

1. A.day book or general journal
2. B.cash book and ledger accounts showing debtors and creditors balances
3. C.cash journal, sales journal and purchases journal
4. D.day book in which transactions are described in chronological order.

A fixed cost is fixed only in relation to

1. A.the quantity of goods produced
2. B.the quantity of goods sold
3. C.a given period of time and a range of activities
4. D.a given period of time and the nature of activity.

One of the shortcomings of single entry procedures is that

1. A.a trial balance is not available
2. B.profits are overestimated
3. C.there are no subsidiary books
4. D.there are no control accounts.

When a customer's cheque is returned unpaid in a debtor's control accounting system, the treatment will be

1. A.debit bank, credit customer and credit control account
2. B.credit bank, debit customer, and debit control account
3. C.debit customer, credit control account and credit bank
4. D.credit control account, debit bank and debit customer.

Didi Ltd offered 10,000 ordinary shares of ₦1.50 each at a discount of 2% which were fully subscribed. With regard to the offer above,

1. A.shares are never offered at a discount; the offer is invalid
2. B.the value of shares in the capital account will be lowered by 2%
3. C.the company incurs a loss to the tune of 2% of the offer
4. D.each of the subscribers loses 2% of investment.

Use the information below to answer questions 28 and 29.
Maro Merchant Bank Plc is to issue 500,000 ordinary shares of 50k each at ₦3.00 per share. Applications were received for 1,550,000 shares fully paid, 1,250,000 shares are to be issued on a pro rata basis and excess subscriptions were dishonoured and refunds made.
The refund due to an application for 25,000 shares is

1. A.₦45,000
2. B.₦30,000
3. C.₦7,500
4. D.₦5,000.

Use the information below to answer questions 28 and 29.
Maro Merchant Bank Plc is to issue 500,000 ordinary shares of 50k each at ₦3.00 per share. Applications were received for 1,550,000 shares fully paid, 1,250,000 shares are to be issued on a pro rata basis and excess subscriptions were dishonoured and refunds made.
What will be the number of shares to be issued to a subscriber who applied for 30,000 shares?

1. A.20,000
2. B.18,000
3. C.15,000
4. D.12,000.

Which of the following items does not feature in the balance sheet of a club?

1. A.Arrears of current year's subscription
2. B.Salary arrears paid in the current year
3. C.Rental income received in advance
4. D.Advance subscription in respect of a coming year.

An outright sale of a partnership amounts to the

1. A.compensation of vendors by the purchase
2. B.admission of a new partner
3. C.purchase of rights of a dead partner
4. D.change of sharing ratio of vendors.

Given:
(₦)
Opening cash balance 20,000
Sale of match tickets 15,000
Clearing of pitch 1,200
Refreshments 3,500
Referees' allowance 1,000
Cost of petrol for bus 1120
Donation from local government 3,800
The club's cash balance is

1. A.₦39,180
2. B.₦34,830
3. C.₦34,380
4. D.₦31,980.

Use the information below to answer questions 33 and 34.
Maimalari Ltd had I. Earnings per share 47k II. Dividend per share 30k III. Par value of each share ₦1.20 IV. Market price per share ₦1.50.
The company's earnings yield is

1. A.20.00%
2. B.25.00%
3. C.31.33%
4. D.39.17%.

Use the information below to answer questions 33 and 34.
Maimalari Ltd had I. Earnings per share 47k II. Dividend per share 30k III. Par value of each share ₦1.20 IV. Market price per share ₦1.50.
What will be the price earnings ratio of the company?

1. A.3.91
2. B.3.19
3. C.2.95
4. D.2.55

The Partnership Deed normally specifies

1. A.how profits or losses are to be shared
2. B.the capital to be contributed annually
3. C.how salaries are paid to employees
4. D.the profit that should be earned annually.

The accumulated fund of a non-trading concern can equally be referred to as

1. A.members' equity
2. B.share capital
3. C.general fund
4. D.surplus fund.

Whan a purchased business is revalued, the effect is that

1. A.a decrease in the value of asset has no effect on value of goodwill
2. B.an increase in the value of asset is treated as an increase in the value of goodwill
3. C.a decrease in the value of asset is treated as a decrease in the value of goodwill
4. D.an increase in the value of asset is treated as a decrease in the value of goodwill.

An item of appropriation in partnership profit and loss account is

1. A.interest on partners' capital
2. B.interest on partners' loan
3. C.employees' salaries
4. D.partners' drawings.

Use the information below to answer questions 39 and 40.
Rakiya and Joy are in partnership and agreed that 5% interest per annum is to be charged on drawings. The drawing made by both partners in one year were: Rakiya, ₦200 on March 31 and ₦300 on September 30. Joy, ₦100 on April 1 and ₦240 on July 1.
The interest on Joy's drawing is

1. A.₦6.00
2. B.₦7.25
3. C.₦9.00
4. D.₦9.75

Use the information below to answer questions 39 and 40.
Rakiya and Joy are in partnership and agreed that 5% interest per annum is to be charged on drawings. The drawing made by both partners in one year were: Rakiya, ₦200 on March 31 and ₦300 on September 30. Joy, ₦100 on April 1 and ₦240 on July 1.
Assuming that Rakiya was not credited with any income during the period, what is her closing current account balance?

1. A.₦340.00 credit
2. B.₦349.75 debit
3. C.₦500.00 credit
4. D.₦511.25 debit.

A business is acquired at par when the

1. A.purchase consideration equals goodwill
2. B.purchase consideration equals net value
3. C.purchase consideration is greater than the net value
4. D.net assets is greater than the liabilities.

Yola Social Club Statement of Account 1999 financial year (₦)
31/12/98: Subscription in arrears 21,000; Subscription in advance 12,000
Receipts during 1999: Arrears 1998 21,000; Dues 1999 48,000; Advance 2000 11,000
The subscription transferable to the income and expenditure account is

1. A.₦48,000
2. B.₦59,000
3. C.₦60,000
4. D.₦69,000.

The most appropriate basis for apportioning inventory holding cost among departments is to use the value of

1. A.purchases
2. B.opening stock
3. C.closing stock
4. D.average stock.

The body constitutionally charged with the responsibility of examining the audited accounts of the Federation and other reports as referred by the National Assembly is the

1. A.Public Accounts Committee
2. B.Public Audit Committee
3. C.Internal Audit Committee
4. D.External Audit Committee.

I. Meet growth and diversification needs II. Reach out to particular customers or markets III. Comply with some regulatory directives IV. Increase employees' income. Which of the reasons above do companies consider in establishing branches?

1. A.I and II
2. B.I, II and III
3. C.II, III and IV
4. D.III and IV.

The channel through which all government borrowing and domestic lending transactions pass is called

1. A.special trust fund
2. B.agency fund
3. C.national loan fund
4. D.contingency fund.

Given:
(Dept. A; Dept. B)
Floor space 40m²; 60m²
Machine hours 1200; 1400
Turnover ₦36 million; ₦64 million
Labour hours 1000; 1400
A joint cost of ₦72 million incurred by the two departments was apportioned ₦30 million to A and ₦42 million to B. The basis used for apportionment must have been

1. A.labour hours
2. B.floor space
3. C.turnover
4. D.machine hours.

Recurrent expenditure are expenses for the period not exceeding

1. A.10 years
2. B.5 years
3. C.2 years
4. D.1 year.

A major benefit derived from the reconciliation of branch and head office books is to

1. A.determine accurate returns by the branch
2. B.ascertain the correct profit or loss on branch activities
3. C.enable the branch to keep control over stock
4. D.enable the branch to ascertain debtors' balance.