JAMB Principles of Accounts 2002 Question 24

Question 24

Not-for-Profit Organisations

Use the information below to answer questions 24 and 25.
Receipts and Payments Account (Extract)
Receipts (₦): Bal. b/d 4000; Subscription received ?; Donations received 6000; Refreshment sales 10000
Payments (₦): Motor vehicle expenses 12000; Insurance 3000; Ambulance expenses 12500; Electricity 1000; Balance c/d ?
Subscriptions received are always put at 125% of the total donations received and refreshment sales.
What is the closing cash balance?

A.₦11500
B.₦12000
C.₦13000
D.₦13500.

Show the answer and explanation

Answer: A (₦11500)

Explanation

Subscriptions = 125% × (6 000 + 10 000) = 20 000. Receipts = 4 000 + 20 000 + 6 000 + 10 000 = 40 000. Payments = 28 500. Balance = ₦11 500.